Public Law 115-324 (the “Small Business Runway Extension Act of 2018”) amended section 3(a)(2)(C)(ii)(II) of the Small Business Act, 15 U.S.C. 632(a)(2)(C)(ii)(II), to modify the requirements for proposed small business size standards prescribed by an agency without separate statutory authority to issue size standards.

Under section 3(a)(2)(C)(ii) of the Small Business Act as amended, an agency without separate statutory authority to issue size standards must satisfy three requirements to prescribe a size standard. First, the agency must propose the size standard with an opportunity for public notice and comment. Second, the agency must provide for determining the size of a manufacturing concern based on a 12-month average of the concern's employment, the size of a services concern based on a 5-year average of gross receipts, and the size of another business concern on the basis of data of not less than 3 years. Third, the agency must obtain approval of the size standard from the SBA Administrator.

In contrast to agencies subject to section 3(a)(2)(C), SBA has independent statutory authority to issue size standards. Under section 3(a)(2)(A) of the Small Business Act, the SBA Administrator may specify detailed definitions or standards by which a business concern may be determined to be a small business concern for the purposes of SBA's programs or any other Federal Government program. Section 3(a)(2)(B) of the Small Business Act further provides that such definitions may utilize the number of employees, dollar volume of business, net worth, net income, a combination thereof, or other appropriate factors. To determine eligibility for Federal small business assistance, SBA establishes detailed size definitions for small businesses (usually referred to as “size standards”) that vary from industry to industry reflecting differences among the various industries. SBA typically uses two primary measures of business size for size standards purposes: (i) Annual average gross receipts for businesses in services, retail trade, agricultural, and construction industries, and (ii) average number of employees for businesses in all manufacturing and most mining and utilities industries. SBA uses financial assets for certain financial industries and refining capacity, in addition to employees, for the petroleum refining industry to measure business size.

The SBA's size standards establish eligibility for a variety of Federal small business assistance programs, including Federal government contracting and business development programs designed to assist small businesses in obtaining Federal contracts, and for SBA's loan guarantee programs, which provide access to capital for small businesses that are unable to qualify for conventional loans elsewhere. The government contracting programs that use SBA's size standards include the SBA's 8(a) Business Development (BD) program, the Historically Underutilized Business Zones (HUBZone) program, the Service Disabled Veteran-Owned Small Business (SDVOSB) program, the Woman-Owned Small Business (WOSB) program, and the Economically Disadvantaged Woman-Owned Small Business (EDWOSB) program. In fiscal year 2017, small businesses received $105.7 billion in Federal contracts, including $42.0 billion in set-aside contracts for small businesses. Small businesses received $25.6 billion in Federal set-aside contracts in fiscal year 2017 through the SBA's 8(a), HUBZone, SDVOSB, WOSB, and EDWOSB programs. (In addition to using SBA's size standards, SBA's Small Business Investment Company (SBIC), Certified Development Company (CDC/504), and 7(a) loan programs use either the industry-based size standards or tangible net worth and net income based alternative size standards to determine eligibility for those programs.)

SBA has long interpreted section 3(a)(2)(C) of the Small Business Act as not applying to SBA's size standards issued under section 3(a)(2)(A). In the preambles to the proposed and final rules implementing 3(a)(2)(C), SBA explained that the Small Business Act requires that other Federal agencies use SBA's size standards or else use their own size standards that meet the requirements as set forth in that section. 65 FR 4176 (Jan. 26, 2000) and 67 FR 13714 (March 26, 2002). In the final implementation in 2002, SBA interpreted section 3(a)(2)(C) as applying only to non-SBA agencies, stating, “Unless a statute specifies size standards for an agency's program or gives an agency direct authority to establish size standards, the agency must use the applicable size standards established by SBA.” However, the Act allows an agency to “prescribe a size standard for categorizing a business concern as a small business concern ( see sec. 3(a)(2)(C) of the Act) provided that the contemplated size standard meets certain criteria and the agency obtains approval of the SBA Administrator.” 67 FR 13714. Since 2002, SBA has repeated this interpretation of section 3(a)(2)(C) in the Federal Register 52 times: 67 FR 48423; 67 FR 61835; 68 FR 74841; 70 FR 68373; 70 FR 72582; 71 FR 28610; 72 FR 41242; 72 FR 61577; 73 FR 41241; 73 FR 42519; 74 FR 53953; 74 FR 53923; 74 FR 53937; 75 FR 61596; 75 FR 61602; 75 FR 61608; 76 FR 14339; 76 FR 27950; 76 FR 63524; 76 FR 63228; 76 FR 70693; 76 FR 70679; 77 FR 7513; 77 FR 11016; 77 FR 10945; 77 FR 42211; 77 FR 42224; 77 FR 42453; 77 FR 55753; 77 FR 55767; 77 FR 58746; 77 FR 58754; 77 FR 58759; 77 FR 72775; 77 FR 72701; 77 FR 72707; 78 FR 37415; 78 FR 37403; 78 FR 37421; 78 FR 37408; 78 FR 77342; 78 FR 77350; 79 FR 28645; 79 FR 33654; 79 FR 53665; 79 FR 54170; 81 FR 3947; 81 FR 3955; 81 FR 4466; 81 FR 4485; 82 FR 18263; 82 FR 44893. Additionally, in the final Size Standards Methodology that SBA issued in April 2009, SBA stated, “Paragraph 3(a)(2)(C) refers to the establishment of size standards by other Federal agencies. SBA generally applies these same provisions when it establishes its size standards, but the Agency is not legally bound by them. On the other hand, Paragraphs 3(a)(2)(A) and 3(a)(2)(B) give the Administrator the flexibility to evaluate and establish size standards using a broader range of criteria, depending on what the Administrator determines will serve small businesses the best.” Thus, section 3(a)(2)(C) pertains to special size standards that agencies prescribe for defining small businesses for their programs when they determine that SBA's size standards are not appropriate for such programs.

SBA grounds this long-standing interpretation of section 3(a)(2)(C) on the following facts. First, SBA has applied a 3-year average for receipts-based size standards since January 1956, see 21 FR 80, and the requirement in section 3(a)(2)(C) for an agency lacking specific authority to use a 3-year average was not passed into law until 38 years later on October 22, 1994 through the Small Business Administration Reauthorization and Amendments Act of 1994, Public Law 103-403, section 301. Second, the legislative history from the U.S. Senate Committee on Small Business and Entrepreneurship specifically excepts SBA from section 3(a)(2)(C) by stating that the 1994 amendment “clarifies that a Federal Department or agency, other than the Administration, may issue a size standard set in terms of number of employees, average annual gross receipts, or otherwise, only under certain conditions. Those conditions are that the standard is set by rulemaking, including a proposal and an opportunity for public comment, and that the SBA Administrator has approved the standard.” S. Rpt. No. 103-332 (emphasis added). Third, the predecessor statutory provision to section 3(a)(2)(C), which is set forth in section 222(a) of Public Law 102-366, explicitly stated that the specified averaging period applied only “for the use of such department or agency” where the department or agency had issued its own size standard, and the 1994 amendment did not evince any intent to change this rule of limited applicability. Fourth, based on a literal reading of the Small Business Act, section 3(a)(2)(C) only applies where an agency is not specifically authorized by statute to issue size standards, but SBA has specific authorization to issue SBA's size standards in section 3(a)(2)(A) of the Small Business Act. As such, section 3(a)(2)(C) requires that a non-SBA agency obtain approval from the SBA's Administrator for adopting its own size standard.

Nevertheless, to promote consistency government-wide on small business size standards, SBA proposes to change its own size standards to provide for a 5-year averaging period for calculating annual average receipts for all receipts-based size standards. It would be confusing for a service-industry business to use a 3-year average for SBA's receipts-based size standards and switch to a 5-year average for another agency's receipts-based size standards. Similarly, it would be confusing to apply SBA's size standards for a business that is engaged in both service- and non-service industries to use a 5-year average for determining small business status in a service industry but switch to a 3-year average for a non-service industry. Thus, although section 3(a)(2)(C), as amended, permits any agency to use a 3-year average outside of the service industries, SBA proposes to adopt a 5-year averaging period for calculating the annual receipts of businesses for all industries that are subject to receipts-based size standards, including the retail trade, agricultural, and construction industries.

SBA's proposed rule carries out the intent of Public Law 115-324, as expressed in the Report of the House Committee on Small Business, H. Rpt. 115-939. The Committee report states that, to help advanced small businesses successfully navigate the middle market as they reach their small business size thresholds, the bill would lengthen the time in which the SBA measures size through revenue, from the average of the past 3 years to the average of the past 5 years. The Committee report states that the bill would reduce the impact on small businesses from rapid-growth years which would result in spikes in revenue that may prematurely eject a small business out of their small size standard. The Committee report adds that the bill would allow small businesses at every level more time to grow and develop their competitiveness and infrastructure, before entering the open marketplace. The bill, as the report states, would also protect Federal investment in SBA's small business programs by promoting greater chances of success in the middle market for newly graduated firms, resulting in enhanced competition against large prime contractors.

As stated in the Committee report, during the period when annual revenues are rising, the 5-year average will generally be lower than the 3-year average, thereby allowing: (i) Mid-sized businesses who have just exceeded size standards to regain their small business status, and (ii) advanced small businesses close to exceeding the size standard to retain their small business status for a longer period. It is notable that, when annual revenues are declining, the 5-year average may be higher than the 3-year average. This would cause small businesses near the size thresholds to lose their small business status sooner under the 5-year average than under the 3-year average. This is more likely to happen during economic downturns. Businesses that lose their small business status under the 5-year average may be disadvantaged further because they may have to wait several years more to regain their small business status, as compared to under a 3-year average. Newly established firms that have been in business for less than 5 years will receive no benefit from a change to a 5-year average. A firm that has been in business for less than the averaging period simply annualizes the receipts from its full existence.

Additionally, by enabling mid-size businesses to regain small business status and by lengthening the small business status of advanced and successful larger small businesses, the longer averaging period may disadvantage smaller small businesses in more need of Federal assistance than their more advanced and larger counterparts in competing for Federal opportunities. Similar to concerns from mid-size businesses that they lack necessary resources, past performance qualifications and expertise to be able to compete against very large businesses in the full and open market, SBA has also received concerns from smaller small businesses that they also lack resources, past performance qualifications and expertise to be able to compete against more resourceful, qualified, and experienced large small businesses for Federal opportunities for small businesses.

SBA's proposed rule satisfies the requirements of section 3(a)(6) of the Small Business Act, which requires that, to revise, modify, or establish size standards pursuant to section 3(a), SBA must issue a notice of proposed rulemaking that includes, among other things, the anticipated effect of the proposed rulemaking on industry. In this regard, the United States Supreme Court has ruled that agencies must “use the same procedures when they amend or repeal a rule as they used to issue the rule in the first instance.” Perez v. Mortgage Bankers Assn., 135 S. Ct 1199, 1206 (2015).

The proposed rule removes “Schedule K” from the definition of receipts. SBA has found that reviewing Schedule K is generally not useful, but SBA reserves the ability to request a Schedule K as part of SBA's review of the other Internal Revenue Service (IRS) forms listed in section 121.104(a).

For consistency with the size standard averaging period being changed in § 121.104, for the purposes of applying SBA's receipts-based size standards, the proposed rule changes the averaging period for a business that has been in business for 5 or more fiscal years to a 5-year period, i.e., the business calculates its total receipts over the 5-year period and divides by 5. Under the proposed rule, if a business has been in business for less than 5 complete fiscal years, the business calculates its total receipts, divides by the number of weeks in business, and multiplies by 52. This is the same process SBA currently uses when a business has less than 3 complete fiscal years. If a business has a short year as one of its 5 years, the business calculates its total receipts over the 5-year period, divides by the number of weeks in the short year and its other 4 fiscal years, and multiplies by 52. This too is the same process SBA currently uses.

SBA proposes that the 5-year averaging period in § 121.104 would not distinguish between firms in service industries and other firms subject to receipts-based size standards. Although section 3(a)(2)(C) of the Small Business Act, as amended, permits other agencies to use a 5-year averaging period for service-industry firms and a 3-year averaging period for other firms, SBA believes that, in applying SBA's own size standards, separating out service-industry firms would cause confusion and create a greater compliance burden on firms that participate in both services industries and non-services industries (such as agriculture, construction, and retail trade) with receipts-based size standards.

This proposed rule only would affect the application of SBA's size standard rules after the effective date of a final rule. Thus, until the effective date of a final rule, SBA will continue to apply the 3-year averaging period in the present § 121.104 for calculating annual average receipts for all SBA's receipts-based size standards. Since size is determined as of the date when a firm certifies its size as part of its initial offer which includes price, the 3-year calculation period will apply to any offer submitted prior to the effective date of a final rule. Thus, even if SBA receives a request for a size determination or size appeal after the effective date of the final rule, SBA will still use a 3-year calculation period if the determination or appeal relates to a certification submitted prior to the final rule's effective date.

SBA also proposes to clarify how it believes annual receipts should be calculated in connection with the acquisition or sale of a division. Specifically, the proposed rule would provide that the annual receipts of a concern would not be adjusted where the concern sells or acquires a segregable division during the applicable period of measurement or before the date on which it self-certified as small. This would be different from how SBA treats the sale or acquisition of a subsidiary. In the case of a subsidiary, SBA's regulations provide that “[t]he annual receipts of a former affiliate are not included if affiliation ceased before the date used for determining size. This exclusion of annual receipts of a former affiliate applies during the entire period of measurement, rather than only for the period after which affiliation ceased.” 13 CFR 121.104(d)(4).

SBA believes that the sale or acquisition of a division is different from buying or selling a separate legal entity and, as such, should be treated differently. Any receipts attributable to a specific division of a concern are certainly receipts earned by the concern. Even if that division is later sold, its receipts were always part of the receipts directly received by the concern itself, and SBA believes that those receipts should remain a part of the concern's receipts after the sale for purposes of determining the concern's size. Similarly, where a concern acquires a segregable division from another business entity during the applicable period of measurement, the proposed rule would not increase the concern's overall receipts by the amount of receipts attributable to that division. This proposal is consistent with decisions of SBA's Office of Hearings and Appeals (OHA). See, e.g. Size Appeal of Global, A 1st Flagship Co., SBA No. SIZ-5462 (2013) (“OHA has repeatedly held that a firm which acquires most of the assets of a subsidiary or division of a larger firm is affiliated only with that subsidiary or division, and not with the entire parent company.”).

SBA understands that some may feel that distinguishing the sale of a division from that of a subsidiary would elevate form over substance, and would merely require a seller to move assets into a separate subsidiary and then sell that subsidiary in order to bring the transaction under the rule. However, SBA believes that there really is an important distinction between a division and a separate legal entity. SBA specifically requests comments on this issue.

As required by Public Law 115-324, SBA is proposing to amend the requirements for agencies that seek to propose and adopt size standards for their own programs, instead of applying SBA's size standards. Under the proposed rule, a non-SBA agency's receipts-based size standard applying to services-industry firms must be proposed with an averaging period of at least 5 years.

SBA is not proposing to change the requirement that other agency's size standards for firms other than service and manufacturing firms use data over a period of at least 3 years. Such a change is not mandated by Public Law 115-324. Section 3(a)(2)(ii)(III) of the Small Business Act still provides that other agencies prescribe size standards for industries other than services or manufacturing using “data over a period of not less than 3 years.” Because Congress did not change this statutory language, SBA is reluctant to change it administratively. However, SBA believes that it could also require other agencies establishing size standards for industries other than services or manufacturing to use data over a 5-year period. Since requiring 5 years instead of 3 is not inconsistent with the statutory provision ( i.e., 5 years is “not less than 3 years”), SBA specifically requests comments on whether SBA should require other agencies to use 5 years' worth of data for all industries.

This new calculation period does not affect existing non-SBA size standards. The averaging period for existing non-SBA size standards is not changed unless the responsible agency proposes and finalizes changes to such size standards. This is consistent with the change in Public Law 115-324 to the requirements for prescribing a non-SBA size standard, given the lack of any restrictions in the Small Business Act or Public Law 115-324 on applying an existing size standard. In proposing a change to the averaging period for its existing size standard, the responsible agency should coordinate with SBA using the procedure in § 121.903.

SBA invites comments, input, or suggestions from interested parties on its proposal to change the period for the calculation of annual average receipts for all receipts-based size standards from 3 years to 5 years. The comments should address the following specific issues pertaining to the SBA's proposal.

1. SBA seeks feedback, along with supporting facts and analyses, on whether the Agency should calculate annual average receipts over 5 years for all industries subject to receipts-based size standards or on whether it should use a 5-year annual receipts average for businesses in services industries only and continue using a 3-year annual average for other businesses. SBA is concerned that the latter option may create confusion for both businesses in reporting their size based on annual average receipts and contracting personnel in verifying the size of bidders to Federal contracts.

2. SBA invites input on how the use of annual average receipts over 5 years instead of 3 years would impact both smaller small businesses and more advanced, larger small businesses in terms of getting access to Federal opportunities for small businesses.

The Office of Management and Budget (OMB) has determined that this proposed rule is not a significant regulatory action for purposes of Executive Order 12866. However, in the next section, SBA provides a benefit-cost analysis of this proposed rule, including: (1) A statement of the need for the proposed action, and (2) an evaluation of the benefits and costs—both quantitative and qualitative—of the proposed action and alternatives considered. This rule is also not a “major rule” under the Congressional Review Act, 5 U.S.C. 800, et seq.

As stated elsewhere, the Small Business Act delegates to SBA's Administrator the responsibility for establishing small business size definitions (usually referred to as “size standards”). Recently, Public Law 115-324 modified the requirements for proposed small business size standards prescribed by an agency without separate statutory authority to issue size standards.

The need of this proposed rule is to carry out Public Law 115-324 and to ensure consistency in the calculation of annual average receipts for SBA's size standards. In addition to the averaging requirements, size standards prescribed under section 3(a)(2)(C)(ii) of the Small Business Act must meet two other requirements: (1) Be proposed with an opportunity for public notice and comment, and (2) be approved by the Administrator. Public Law 115-324 does not undo these 2 requirements, and this proposed rule satisfies these requirements.

SBA's mission is to aid and assist small businesses through a variety of financial, procurement, business development and counseling, and disaster assistance programs. This regulatory action promotes the Administration's goals and objectives and meets the SBA's statutory responsibility to implement a new law impacting size definitions for small businesses. One of SBA's goals in support of promoting the Administration's objectives is to help small businesses succeed through access to capital, Federal Government contracts and purchases, and management, technical and disaster assistance.

Changing the period for calculating annual average receipts from 3 years to 5 years may enable some mid-size businesses that have just exceeded size standards to regain small business status. Similarly, it could also allow some advanced and larger small businesses about to exceed size standards to retain their small status for a longer period. However, it could also result in some advanced small businesses having a 5-year receipts average that happens to be higher than the 3-year receipts average, thus ejecting them out of their small business status sooner. Detailed impacts of the proposed change are discussed below.

It is difficult to determine the actual number of small and mid-size businesses that would be impacted by Public Law 115-324 and this regulatory action because there is no data on annual receipts of businesses. The annual receipts data from the Economic Census special tabulation are only available once every 5 years. Similarly, the System for Award Management (SAM) only records the data on 3-year annual average receipts of businesses over their three preceding fiscal years, but not their annual receipts for each fiscal year. For example, the receipts data for year 2018 is an average of annual receipts for 2017, 2016, and 2015. Similarly, the receipts data for 2017 is an average of annual receipts for 2016, 2015, and 2014, and so on. A 5-year receipts average for 2018 would be an average of annual receipts for 2017, 2016, 2015, 2014, and 2013.

Given the lack of annual receipts for each year, SBA approximates a firm's 5-year annual average revenue for 2018 as follows:

This result may slightly underestimate the 5-year revenue average when annual revenues are rising ( i.e., 2014 revenue > 2013 revenue > 2012 revenue) and overestimate it if annual revenues are declining ( i.e., 2014 revenue < 2013 revenue < 2012 revenue).

To estimate the 5-year receipts average for 2018 using the above formula, SBA analyzed the 2018 SAM extracts (as of September 1, 2018) and 2015 SAM extracts (as of September 1, 2015). The above 5-year annual average receipts formula would only work for businesses that were present in both 2015 and 2018 SAM extracts. One challenge was that some businesses found in 2018 SAM could not be found in 2015 SAM and vice versa. Excluding entities registered in SAM for purposes other than government contracting and entities ineligible for small business consideration (such as foreign governments and state-controlled institutions of higher learning), there were a total of 346,958 unique business concerns in SAM subject to at least one receipts-based size standard. Of these concerns, 293,524 (or about 84.6 percent) were “small” in all North American Industry Classification System (NAICS) industries, 9,990 (or 2.9 percent) were “small” in some industries and “not small” in other industries, and 43,444 (or 12.5 percent) were “not small” in any industry.

Excluding entities with “null” or “zero” receipts values, 194,686 firms (or about 56 percent) appeared both in 2018 SAM and in 2015 SAM and were included in the 5-year annual average receipts approximation and calculation of number of businesses impacted. Of those 194,686 matched firms subject to a receipts-based size standard, 154,220 (or about 79 percent) were “small” in all NAICS industries, 8,049 (or 4.1 percent) were “small” in some industries and other than small (“not small”) in other industries, and 32,417 (or about 17 percent) were “not small” in any industry. In other words, 303,514 (or 87.5 percent) of 346,958 total concerns in SAM 2018 and 162,269 (or 83.3 percent) of 194,686 total matched firms were small in at least one NAICS industry with a receipts-based size standard. These results are summarized in Table 1, “Size Status of Businesses in Industries Subject to Receipts-Based Size Standards,” below.

According to Table 2, “Distribution of Business Concerns Subject to Receipts-Based Size Standards by Number of NAICS Codes,” below, the distribution of firms by the number of NAICS codes in the matched data is very similar to that for the overall 2018 SAM data. About 42-44 percent of firms were in only one NAICS code that has a receipts-based size standard, about 35 percent in 2-5 NAICS codes, about 12 percent in 6-10 NAICS codes, and about 8-10 percent in more than 10 NAICS codes. In other words, 56-58 percent of firms were in multiple NAICS codes with receipts-based size standards. Thus, it is quite possible that the proposed change may impact a firm's small business status in multiple industries. For purposes of this analysis, an impacted firm is defined as one that would be impacted by the change in terms of gaining, regaining, extending, or losing small business status in at least one industry with a receipts-based size standard.

A central premise of Public Law 115-324 is that a 5-year annual receipts average (as opposed to a 3-year annual receipts average) would enable some mid-size businesses who have recently exceeded the size standard to regain small business status and some advanced small businesses close to exceeding the size standard to retain their small business status for a longer period. However, this premise would only hold true when businesses' annual revenues are rising. When businesses' annual revenues are declining, due to economic downturns or other factors, the 5-year annual receipts average could be higher than the 3-year annual receipts average, thereby causing small businesses close to their size standards to lose their small business status sooner.

By comparing the approximated 5-year annual receipts average with the current receipts-based size standard for each of the 194,686 matched business concerns in each NAICS code subject to a receipts-based size standard, SBA first estimated the following:

i. The number of mid-size businesses that have exceeded the size standard and would regain small business status in at least one NAICS industry with a receipts-based size standard ( i.e., 3-year average > size standard ≥ 5-year average)—positive impact;

ii. the number of advanced small businesses within 10 percent below the size standard that would have their small business status extended for a longer period in at least one NAICS industry with a receipts-based standard (5-year average < 3-year average ≤ size standard and 0.9*size standard < 3-year average ≤ size standard)—positive impact;

iii. the number of currently small businesses that would lose their small business status in at least one NAICS industry subjected to at least one receipts-based size standard ( i.e., 3-year average ≤ size standard < 5-year average)—negative impact; and

iv. the number of advanced small businesses within 10 percent below the size standard that would have their small status shortened in at least one NAICS industry subject to a receipts-based standard (3-year average < 5-year average ≤ size standard and 0.9*size standard < 3-year average ≤ size standard)—negative impact.

In this proposed rule, SBA is changing the period for calculation of average annual receipts for all of its receipts-based size standards from 3 years to 5 years. The purpose of Public Law 115-324 is to allow small businesses more time to grow and develop competitiveness and infrastructure so that they are better prepared to succeed under full and open competition once they outgrow the size threshold. However, as stated previously, a longer 5-year averaging period may not always and necessarily provide relief to every small business concern. As discussed previously, when annual revenues are declining or when annual revenues for the latest 3 years are lower than those for the earliest 2 years of the 5-year period, the 5-year average would be higher than the 3-year average, thereby ejecting some advanced small businesses out of their small business status sooner or rendering some small businesses under the 3-year average not small immediately.

As discussed earlier, the change in the averaging period for annual receipts from 3 years to 5 years results in four different types of impacts on small businesses: (i) Enabling current large or mid-size businesses to gain small business status (impact i); (ii) enabling current advanced small businesses to lengthen their small business status (impact ii); (iii) causing current small businesses to lose their small business status (impact iii); and (iv) causing current small businesses to shorten their small business status (impact iv). Table 3, `Percentage Distribution of Impacted Firms by the Number of NAICS Codes,' below, provides these results based on the 2018 SAM—2015 SAM matched firms.

It is highly notable that the distribution of impacted firms by the number of NAICS codes, as shown in Table 3, is very different as compared to a similar distribution based on the overall matched and total 2018 SAM data ( see Table 2), especially with respect to firms with only one NAICS code and those with more than 5 NAICS codes. For example, more than 40 percent of all firms in the overall data were associated with only one NAICS code, as compared to less than 20 percent among impacted firms. Similarly, firms with more than 5 NAICS codes accounted for about 20 percent of all firms in the original data, as compared to more than 50 percent among impacted firms. It is also notable that NAICS Sectors 54, 56, and 23 together accounted for more than 70 percent of impacted firms (both negatively and positively impacted), with Sector 54 (Professional, Scientific and Technical Services) accounting for about 35 percent, Sector 23 (Construction) about 25 percent, and Sector 56 (Administrative and Support, Waste Management and Remediation Services) about 12-13 percent.

Each of these impacts was then multiplied by an applicable factor or ratio, as shown in the last column of Table 1, to obtain the respective impacts corresponding to all firms in 2018 SAM subject to at least one receipts-based size standard. These results are presented below in Table 4, “Impacts from Changing the Averaging Period for Receipts from 3 Years to 5 Years.” The last column of the table shows the percent of firms impacted relative to all business concerns in 2018 SAM.

Because the SAM data only captures businesses that are primarily interested in Federal procurement opportunities, the SAM-based results do not capture the impacts the proposed change may have on businesses participating in various non-procurement programs that apply to SBA's receipts-based size standards, such as SBA loan programs and exemptions from compliance with paperwork and other regulatory requirements.

The Economic Census, combined with the Census of Agriculture and County Business Patterns Reports, provides for each NAICS code information on the number of total small and large businesses subjected to a receipts-based size standard. Based on the matched SAM data, SBA computed percentages of businesses impacted under each impact category for each NAICS industry subject to a receipts-based size standard. By applying such percentages to the 2012 Economic Census tabulation, SBA estimated the number of all businesses impacted under each impact type for each NAICS code subject to a receipts-based size standard. These results are presented in Table 5, “Impacts from Changing the Averaging Period for Receipts from 3 Years to 5 Years (2012 Economic Census),” below.

Currently large or mid-size businesses regaining small business status would get various benefits as small business concerns, including access to Federal set-aside contracts, SBA's guaranteed loans and disaster assistance, reduced patent fees, and exemptions from various compliance and paperwork requirements. With their small business status extended, advanced small businesses would continue to receive such benefits for a longer period. However, the proposed change may also cause some small businesses to lose their small business status in at least one receipts-based size standard and access to small business assistance, especially Federal set-aside opportunities.

OMB directs agencies to establish an appropriate baseline to evaluate benefits, costs, or transfer impacts of regulatory actions and alternative approaches considered, if any. The baseline should represent the agency's best assessment of what the world would look like absent the regulatory action. For a new regulatory action modifying an existing regulation (such as changing the annual average receipts calculation from 3 years to 5 years), a baseline assuming no change to the regulation ( i.e., maintaining the status quo) generally provides an appropriate benchmark for evaluating benefits, costs, or transfer impacts of proposed regulatory changes and their alternatives.

Based on the 2012 Economic Census special tabulations (the latest available), 2012 County Business Patterns Reports (for industries not covered by the Economic Census), and 2012 Agricultural Census tabulations (for agricultural industries), of a total of about 7.2 million firms in all industries with receipts-based size standards, about 96 percent are considered small and 4 percent other than small under the 3-year annual receipts average. Similarly, of 346,958 businesses that were subject to at least one receipts-based size standard and eligible for Federal contracting, 87.5 percent were small in at least one NAICS code and 12.5 percent other than small in all NAICS codes.

Based on the data from the Federal Procurement Data System—Next Generation (FPDS-NG) for fiscal years 2015-2017, on average, about 88,770 unique firms in industries subject to receipts-based size standards received at least one Federal contract during that period, of which 83 percent were small. Businesses subject to receipts-based standards received $182 billion in annual average Federal contract dollars during that period, of which nearly $64 billion or about 35 percent went to small businesses. Of total dollars awarded to small businesses subject to receipts-based size standards, $45 billion or 71 percent was awarded through various small business set-aside programs and another 29 percent was awarded through non-set aside contracts.

Based on SBA's internal data on its loan programs, small businesses subject to receipts-based size standards received, on an annual basis, a total of nearly 58,600 7(a) and 504 loans for fiscal years 2016-2018, totaling $24.5 billion, of which 85 percent was issued through the 7(a) program and 15 percent was issued through the CDC/504 program. During fiscal year 2018, small businesses in those industries also received about 11,350 loans through the SBA's Economic Injury Disaster Loan (EIDL) program, totaling about $1.0 billion on an annual basis. Table 6, “Baseline Analysis of Receipts-Based Size Standards,” below, provides these baseline results.

Besides set-aside contracting and financial assistance discussed above, small businesses also benefit through reduced fees, less paperwork, and fewer compliance requirements that are available to small businesses through Federal agencies that use SBA's size standards. However, SBA has no data to estimate the number of small businesses receiving such benefits. Similarly, due to the lack of data, SBA is not able to determine impacts the proposed rule will have on small businesses participating in other agencies' programs that are subject to their own size standards based on annual average receipts.

As mentioned previously, businesses that would regain or lose small business status can be identified by comparing their 5-year receipts average with the size standard. That is, if the 5-year receipts average of a firm currently above the size standard is lower than the applicable size standard, that firm will gain or regain small business status. Similarly, if the 5-year annual receipts average of a currently small business is higher than the size standard, that business will lose its small business status. However, to estimate the number of small businesses that would benefit by having their small business status extended for a longer period or would be penalized by having their small size status shortened, SBA considered small businesses whose 3-year annual average receipts average was within 10 percent below their receipts-based size thresholds. Small businesses that are not immediately impacted may be impacted either negatively or positively someday as they continue to grow and approach the size standard threshold.

The most significant benefits to businesses from the proposed change in the period for calculation of annual average receipts from 3 years to 5 years include: (i) Enabling some mid-size businesses currently categorized above their corresponding size standards to gain or regain small business size status and thereby qualify for participation in Federal assistance intended for small businesses, and (ii) allowing some advanced and larger small businesses close to their size thresholds to lengthen their small business status for a longer period and thereby continue their participation in Federal small business programs. These include SBA's loan programs, EIDL program, and Federal procurement programs intended for small businesses. Federal procurement programs provide targeted, set-aside opportunities for small businesses under SBA's various business development and contracting programs, including 8(a)/BD, HUBZone, WOSB, EDWOSB, and SDVOSB programs. Benefits accruing to businesses gaining and extending small status are presented below in Table 7, “Positive Impacts of Changing the Averaging Period for Receipts from 3 Years to 5 Years.” The results in Table 7 pertain to businesses and industries subject to receipts-based size standards only.

As shown in Table 7, of 43,444 firms not currently considered small in any receipts-based size standards, 3,260 (or 7.5 percent) would benefit from the proposed change by gaining or regaining small status under the 5-year receipts average in at least one NAICS industry that is subject to a receipts-based size standard. Additionally, about 3,800 or 1.3 percent of small businesses within 10 percent below size standards would see their annual receipts decrease under the 5-year averaging period, consequently enabling them to keep their size status for a longer period.

Using the 2012 Economic Census, SBA estimated that about 7,800 or 2.9 percent of currently large businesses would gain or regain small status and more than 62,800 or 0.9 percent of total small businesses would see their small business status extended for a longer period as the result of this proposed rule. These results are shown in Table 7, below.

With more businesses qualifying as small under the proposed change, Federal agencies will have a larger pool of small businesses from which to draw for their small business procurement programs. Growing small businesses that are close to exceeding the current size standards will be able to retain their small business status for a longer period under the 5-year receipts average, thereby enabling them to continue to benefit from the small business programs.

Based on the FPDS-NG data for fiscal years 2015-2017, as shown in Table 7, SBA estimates that those newly qualified small businesses ( i.e., large businesses gaining small status) under the proposed rule, if adopted, could receive $961 million in small business contract dollars annually under SBA's small business, 8(a)/BD, HUBZone, WOSB, EDWOSB, and SDVOSB programs. That represents a 1.5 percent increase to total small business contract dollars from the baseline. Additionally, small businesses could receive approximately $133 million in additional small business contract dollars because of extension of their small business status, which is about a 0.2 percent increase from the total small business contract dollars in the baseline. That is, businesses gaining or extending small business status could receive about $1.1 billion in additional small business contract dollars, which is a 1.7 percent increase to the total small business dollars in the baseline.

Under SBA's 7(a) and 504 loan programs, based on the data for fiscal years 2016-2018, SBA estimates up to about 54 SBA 7(a) and 504 loans totaling nearly $22.0 million could be made to these newly qualified small businesses under the proposed change. Additionally, small businesses could receive up to 478 SBA 7(a) and 504 loans totaling $189 million due to the extension of their size status. These are, respectively, 0.1 percent and 0.8 percent increases to the loan amount in the baseline.

Newly qualified small businesses and those with extended small business status will also benefit from the SBA's EIDL program. Since the benefit provided through this program is contingent on the occurrence and severity of a disaster in the future, SBA cannot make a meaningful estimate of this impact. However, based on the historical trends of the EIDL data, SBA estimates that, on an annual basis, the newly defined small businesses under the proposed change could receive about 21 EIDL loans, totaling about $21 million. Similarly, extending small business status for a longer period could result in small businesses receiving 84 EIDL loans, totaling about $7.8 million. These results are presented in Table 7, above.

The added competition from more businesses qualifying as small may result in lower prices to the Federal Government for procurements set aside or reserved for small businesses, but SBA cannot quantify this impact. Costs could be higher when full and open contracts are awarded to HUBZone businesses that receive price evaluation preferences. However, with agencies likely setting aside more contracts for small businesses in response to a larger pool of small businesses under the proposed change, HUBZone firms might actually end up getting more set-aside contracts and fewer full and open contracts, thereby resulting in some cost savings to agencies. While SBA cannot estimate such costs savings, as it is impossible to determine the number and value of unrestricted contracts to be otherwise awarded to HUBZone firms that will be awarded as set-asides, such cost savings are likely to be relatively small as only a small fraction of full and open contracts are awarded to HUBZone businesses.

Additionally, the newly defined small businesses, as well as those with a longer small business status, would also benefit from reduced fees, less paperwork, and fewer compliance requirements but SBA has no data to quantify this impact.

The proposed change will also address some of the challenges and uncertainties small businesses face in the open market once they graduate from their small business status. Small and mid-size businesses experience a considerable disadvantage in competing for full and open contracts against large businesses, including the largest in the industry. These large businesses have several competitive advantages over small and mid-size firms, including vast past performance qualifications and experience, strong brand-name recognition, a plethora of professional certifications, security clearances, and greater financial and marketing resources. Small and mid-size businesses cannot afford to maintain these resources, leaving them at a considerable disadvantage.

With contracts getting bigger, one large set-aside contract could throw a firm out of its small business size status, thereby subjecting it to certain requirements that apply to other-than-small firms, such as developing subcontracting plans. That firm may not have the infrastructure, existing business processes, and/or other resources in place in order to comply with such requirements. This may also result in constant shuffling between small and other-than-small status.

By allowing smaller mid-size companies that have just exceeded the size threshold to regain small business status and advanced small businesses close to size standards to prolong their small business status for a longer period, this proposed rule can expand the pool of qualified small firms for agencies to draw upon to meet their small business requirements.

As stated previously, the change enacted under Public Law 115-324 may not always and necessarily benefit every small business concern. When businesses' annual revenues are declining or when annual revenues for the latest 3 years are lower than those for the earliest 2 years of the 5-year period, the 5-year average would be higher than the 3-year average, thereby ejecting small businesses out of their small status sooner or rendering some small businesses other than small immediately. Such small businesses would no longer be eligible for Federal small business opportunities, such as SBA's loans, Federal small business contracts, and other Federal assistance available to small businesses. These impacts are provided in Table 8, “Negative Impacts from Changing the Averaging Period for Receipts from 3 Years to 5 Years,” below.

SBA estimates that, of 303,514 firms in 2018 SAM that were small under at least one receipts-based size standard based on the 3-year receipts average, 2,855 firms (or 0.9 percent) would lose their small status and another 347 firms (or 0.1 percent) would see their size status shortened as a result of the proposed change. Similarly, based on the 2012 Economic Census data, about 62,650 firms would lose their small business status and about 5,950 firms would see their size status shortened, which represent, respectively, 0.9 percent and 0.1 percent of total small firms subject to a receipts-based size standard.

Based on the contract awards data from FPDS-NG for fiscal years 2015-2017, businesses losing or shortening small status would lose access to about $335 million in Federal small business contract collars, which is about a 0.5 percent decrease from the corresponding value in the baseline. Similarly, based on the SBA's loan data for fiscal years 2016-2018 and the number of impacted firms from the Economic Census, SBA estimates that businesses losing or shortening small status would also lose access to about $277 million in SBA 7(a) and 504 loans and $12 million in EIDL loans. These are, respectively, 1.1 percent and 1.2 percent of the corresponding baseline values.

Businesses losing small status and those with size status shortened would also be deprived of other Federal benefits available, including reduced fees and exemptions from certain paperwork and compliance requirements. However, there exists no data to quantify this impact.

Additionally, by enabling mid-size businesses to regain small business status and lengthening the small business status of advanced and successful larger small businesses, the proposed rule may disadvantage smaller small businesses in more need of Federal assistance than their larger counterparts in competing for Federal opportunities. SBA frequently receives concerns from smaller small businesses that they also lack resources, past performance qualifications and expertise to be able to compete against more resourceful, qualified and experienced large small businesses for Federal opportunities for small businesses.

Besides having to register in SAM to be able to participate in Federal contracting and update the SAM profile annually, small businesses incur no direct costs to gain or retain their small business status. All businesses willing to do business with the Federal Government have to register in SAM and update their SAM profiles annually, regardless of their size status. SBA believes that a vast majority of businesses that are willing to participate in Federal contracting are already registered in SAM. Furthermore, this proposed rule does not establish the new size standards for the first time; rather, it merely proposes to modify the calculation of annual average receipts that apply to the existing size standards in accordance with a statutory requirement.

The proposed change may entail some additional administrative costs to the Federal Government because more businesses may qualify as small for Federal small business programs. For example, there will be more firms seeking SBA's loans; more firms eligible for enrollment in the Dynamic Small Business Search (DSBS) database or in certify.sba.gov; more firms seeking certification as 8(a)/BD or HUBZone firms or qualifying for small business, WOSB, EDWOSB, and SDVOSB status; and more firms applying for SBA's 8(a)/BD and All-Small Mentor-Protégé programs. With an expanded pool of small businesses, it is likely that Federal agencies will set aside more contracts for small businesses under the proposed change. One may surmise that this might result in a higher number of small business size protests and additional processing costs to agencies. However, the SBA's historical data on size protests actually shows that the number of size protests actually decreased after an increase in the number of businesses qualifying as small as a result of size standards revisions as part of the first 5-year review of size standards. Specifically, on an annual basis, the number of size protests dropped from about 600 during fiscal years 2011-2013 (review of most receipts-based size standards was completed by the end of fiscal year 2013) to about 500 during fiscal years 2014-2016. However, with more years of data to be reviewed, 5-year averaging may increase time needed by size specialists to process a size protest. Among those newly defined small businesses seeking SBA's loans, there could be some additional costs associated with compliance and verification of their small business status. However, small business lenders have an option of using the tangible net worth and net income based alternative size standard instead of using the industry-based size standard to establish eligibility for SBA's loans. For these reasons, SBA believes that these added administrative costs will be minor because necessary mechanisms are already in place to handle these added requirements.

Additionally, some Federal contracts may possibly have higher costs. With a greater number of businesses defined as small under the proposed change, Federal agencies may choose to set aside more contracts for competition among small businesses only instead of using full and open competition. The movement of contracts from unrestricted competition to small business set-aside contracts might result in competition among fewer total bidders, although there will be more small businesses eligible to submit offers under the proposed change. However, the additional costs associated with fewer bidders are expected to be minor since, by law, procurements may be set aside for small businesses under the 8(a)/BD, HUBZone, WOSB, EDWOSB, or SDVOSB programs only if awards are expected to be made at fair and reasonable prices.

Costs may also be higher when full and open contracts are awarded to HUBZone businesses that receive price evaluation preferences. However, with agencies likely setting aside more contracts for small businesses in response to the availability of a larger pool of small businesses under the proposed increases to size standards, HUBZone firms might actually end up getting fewer full and open contracts, thereby resulting in some cost savings to agencies. However, such cost savings are likely to be minimal as only a small fraction of unrestricted contracts are awarded to HUBZone businesses.

As discussed elsewhere, the proposed rule would result in four primary impacts, which can be categorized as either having a `positive impact' or `negative impact' on size status of both currently large and small businesses. Allowing some currently large firms to gain small business status and some advanced small firms to remain small for a longer period represents the positive impact of the proposed rule. Causing some currently small firms to lose or shorten their small business is the negative impact.

Although businesses in a majority of industries with receipts-based size standards would be both positively and negatively impacted by this proposed rule, in totality the number firms with positive impacts was generally greater than the number of firms with negative impacts. The proposed rule would result in a net gain of about $759 million (or 1.2 percent) in Federal small business dollars. However, due to the relative sizes of the industries in terms of the number of firms, the net impact of the proposed rule on SBA loans was slightly negative. SBA estimates a net loss of 0.3 percent of 7(a) and 504 loans and 0.2 percent of EIDL loans to small firms as a result of changing the period for calculating annual average receipts from 3 years to 5 years. Net impacts of the proposed rule are summarized in Table 9, “Net Impact from Changing the Averaging Period for Receipts from 3 Years to 5 Years,” below.

The proposed change may result in some redistribution of Federal contracts between businesses gaining or extending small status and large businesses, and between businesses gaining or extending small status and other existing small businesses. However, it would have no impact on the overall economic activity since the total Federal contract dollars available for businesses to compete for will not change. While SBA cannot quantify with certainty the actual outcome of the gains and losses from the redistribution of contracts among different groups of businesses, it can identify several probable impacts in qualitative terms. With the availability of a larger pool of small businesses under the proposed change, some unrestricted Federal contracts may be set aside for small businesses. As a result, large businesses may lose access to some Federal contracts. Similarly, some currently small businesses may obtain fewer set-aside contracts due to the increased competition from some large businesses qualifying as small and advanced small businesses remaining small for a longer period. This impact may be offset by a greater number of procurements being set aside for all small businesses. With large businesses qualifying as small and advanced larger small businesses remaining small for a longer period under the proposed rule, smaller small businesses could face some disadvantages in competing for set-aside contracts against their larger counterparts. However, SBA cannot quantify these impacts.

This action meets applicable standards set forth in Sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden. This action does not have retroactive or preemptive effect.

For purposes of Executive Order 13132, SBA has determined that this proposed rule will not have substantial, direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, SBA has determined that this proposed rule has no federalism implications warranting preparation of a federalism assessment.

Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. A description of the need for this regulatory action and benefits and costs associated with this action, including possible distributional impacts that relate to Executive Order 13563 is included above in the Benefit-Cost Analysis under Executive Order 12866. Additionally, Executive Order 13563, Section 6, calls for retrospective analyses of existing rules.

Following the enactment of Public Law 115-324, SBA issued a public notice advising business and contracting communities that SBA must go through a rulemaking process to implement the new law and that businesses still must report their receipts based on a 3-year average until SBA changes its regulations. SBA updated the Small Business Procurement Advisory Council (SBPAC) at its March 26, 2019, and April 23, 2019, meetings about SBA's rulemaking process to implement Public Law 115-324. On April 18, 2019, SBA also presented an update on the implementation of Public Law 115-324 at the 2019 Annual Government Procurement Conference. Through phone calls and emails, SBA also advised business and contracting communities and other interested parties about the SBA's process to implement the new law.

Additionally, SBA issued a revised draft white paper titled “Small Business Size Standards: Revised Size Standards Methodology” and published a notice in the April 27, 2018, issue of the Federal Register (83 FR 18468) to advise the public that the document is available for public review and comments. The Revised Size Standards Methodology explains how SBA establishes, reviews, and modifies its receipts-based and employee-based small business size standards. On April 11, 2019, SBA published a Federal Register Notice (84 FR 14587) advising the public that the Agency has issued the revised final white paper.

This proposed rule is not expected to be an Executive Order 13771 regulatory action because this proposed rule is not significant under Executive Order 12866.

Under the Regulatory Flexibility Act (RFA), this proposed rule, if adopted, may have a significant impact on a substantial number of small businesses in industries subject to receipts-based size standards. As described above, this rule may affect small businesses in those industries seeking Federal contracts, loans under SBA's 7(a), 504 and EIDL programs, and assistance under other Federal small business programs.

Immediately below, SBA sets forth an initial regulatory flexibility analysis (IRFA) of this proposed rule to address the following questions: (1) What is the need for and objective of the rule?; (2) What is SBA's description and estimate of the number of small businesses to which the rule will apply?; (3) What are the projected reporting, record-keeping, and other compliance requirements of the rule?; (4) What are the relevant Federal rules that may duplicate, overlap, or conflict with the rule?; and (5) What alternatives will allow the Agency to accomplish its regulatory objectives while minimizing the impact on small businesses?

Recently, Public Law 115-324 amended section 3(a)(2)(C)(ii)(II) of the Small Business Act by modifying the period for calculating annual average receipts of business concerns providing services in a proposed size standard prescribed by an agency without separate statutory authority to issue size standards from 3 years to 5 years. This proposed rule is needed to implement Public Law 115-324 and to make consistent changes to SBA's definition of annual receipts by amending the SBA's regulations on the calculation of annual average receipts for all receipts-based standards from over 3 years to over 5 years.

This proposed rule applies to all small businesses that are subject to a receipts-based size standard. Based on the 2012 Economic Census special tabulations, 2012 County Business Patterns Reports, and 2012 Agricultural Census tabulations, of a total of about 7.2 million firms in all industries with receipts-based size standards to which the rule will apply, 6.9 million or about 96.0 percent are considered small under the 3-year annual receipts average. Of 346,958 total concerns in SAM 2018 to which the rule will apply, about 303,500 or 87.5 percent were small in at least one NAICS industry with a receipts-based size standard. Similarly, based on the data from FPDS-NG for fiscal years 2015-2017, on average, about 88,770 unique firms in industries subject to receipts-based size standards received at least one Federal contract during that period, of which 83 percent, or 73,825 were small.

The proposed rule changes existing reporting or record-keeping requirements for small businesses. In reporting receipts to SBA for an SBA size determination, businesses will report a 5-year average rather than a 3-year average. To qualify for Federal procurement and a few other programs requires businesses to register in SAM and to self-certify that they are small at least once annually. Therefore, businesses opting to participate in those programs must comply with SAM requirements. There are no costs associated with SAM registration or certification. Changing size standards alters access to SBA's programs that assist small businesses but does not impose a regulatory burden because they neither regulate nor control business behavior.

Under section 3(a)(2)(C) of the Small Business Act, 15 U.S.C. 632(a)(2)(C), Federal agencies must use SBA's size standards to define a small business, unless specifically authorized by statute to do otherwise. In 1995, SBA published in the Federal Register a list of statutory and regulatory size standards that identified the application of SBA's size standards as well as other size standards used by Federal agencies (60 FR 57988 (November 24, 1995)). SBA is not aware of any Federal rule that would duplicate or conflict with establishing size standards.

However, the Small Business Act and SBA's regulations allow Federal agencies to develop different size standards if they believe that SBA's size standards are not appropriate for their programs, with the approval of SBA's Administrator (13 CFR 121.903). The Regulatory Flexibility Act authorizes an Agency to establish an alternative small business definition, after consultation with the Office of Advocacy of the U.S. Small Business Administration (5 U.S.C. 601(3)).

By law, SBA is required to develop numerical size standards for establishing eligibility for Federal small business assistance programs. Other than varying size standards by industry and changing the size measures, no practical alternative exists to the systems of numerical size standards. As stated elsewhere, the objective of this proposed rule is to change SBA regulations on the calculation of business size in terms of annual average receipts to implement Public Law 115-324 and there are no other alternatives to achieve that objective.

For purposes of the Paperwork Reduction Act, 44 U.S.C. Chapter 35, SBA has determined that this proposed rule would amend an information collection (SBA Form 355, Information for Small Business Size Determination, which was previously approved under OMB Control Number 3245-0101). In addition to seeking reinstatement of this information collection, SBA will also submit it to OMB for approval of the changes described below. Certain proposed revisions in Parts III and IV of Form 355 address the change from 3 years to 5 years for calculating annual average receipts. Other proposed revisions to the form would be to delete unnecessary questions, clarify certain previously approved requests for information, and in some instances, to request additional information where SBA has determined there is a programmatic need. The proposed deletions and clarifications, though not required by the statute, will alleviate the additional burden posed by changing from 3 years to 5 years for calculating annual average receipts.

First, SBA will amend the General Instructions section to define “concern” and “principal stockholders”; state that separate affiliation rules apply in some of SBA's loan and research programs; remove the requirement to identify a labor surplus county, as well as obsolete information about industries with special size standards; and to include in the certification a statement that accompanying documentation is true and correct.

Second, in Part 1, SBA will clarify that the information relates to the applicant business; add a checkbox for the firm to identify its corporate organization structure; require a firm to disclose whether it is organized for profit; and remove various obsolete or unnecessary information regarding county/city, purpose of the size determination, the contracting agency, the business's major products or services and shares of sales, addresses of owners or officers, and recently completed mergers. Part 1 will also be amended to request ownership information for owners that are entities until the respondent identifies the ultimate owners that are natural persons.

Third, in Part II, SBA will limit the information requested about employees to businesses that are being evaluated under an employee-based size standard.

Fourth, in Part III, SBA will limit the information request about receipts to businesses that are being evaluated under a receipts-based size standard. SBA will add 2 additional lines to the entries for annual receipts so that a business that has been in business for 5 years provides information about its most recently competed 5 fiscal years.

Fifth, in Part IV, SBA will add that the business must provide information for any business that the applicant's owner reports on a Schedule C or Schedule E of the owner's personal tax returns if the owner or an immediate family member has a controlling interest in the business, remove the request for addresses of individual owners and managers, request ownership information for owners that are entities until the respondent identifies the ultimate owners that are natural persons, limit the request for employee information to applicants being evaluated under an employee-based size standard, limit the information request for receipts information to applicants being evaluated under a receipts-based size standard, and add two rows to the receipts table so that the receipts of acknowledged affiliates are reported based on a 5-year average.

Sixth, in Part V, SBA will remove requests about acknowledged affiliates that are covered in Part IV; delete questions about performance of work on the contract, financial impact of termination for default, and specific terms and conditions of the contract; and add a question about actual or proposed subcontracts between the applicant and any of its alleged affiliates.

SBA determines that these changes to the information collection will cause the paperwork burden to remain at 4 hours. The changes will require a business in an industry with a receipts-based size standard to gather information about the business's 5 prior fiscal years and complete information about its 5 prior fiscal years and the 5 prior fiscal years for acknowledged affiliates. However, a business with a receipts-based size standard will not complete information about its number of employees. Similarly, a business with an employee-based size standard will not complete information about its receipts. Additionally, SBA has removed all requests for the addresses of individual owners and managers, and deleted 3 questions from Part V.

The deadline and method for submitting comments are as stated above in the DATES and ADDRESSES sections, respectively. The title, summary of the amended information collection, description of respondents, and an estimate of the reporting burden are discussed below. Included in the estimate is the time for reviewing instructions, searching existing data, and completing and reviewing each collection of information.

1. Title and Description: SBA Form 355, Information for Small Business Size Determination. The information provided in this form will be used by SBA for a size determination of a business applying for assistance available to small businesses under any program administered by this Agency, except for its SBIC Program which uses SBA Form 480, or at the request of another Federal agency for purposes of its small business program.

Need and Purpose: This information collection is necessary for SBA to, among other things, evaluate the eligibility of an applicant for SBA's small business programs.

OMB Control Number: 3245-0101.

Description of and Estimated Number of Respondents: This information will be collected from small businesses seeking an SBA determination of size. Based on historical information, SBA estimates this number to be between 500 and 600 each year.

Estimated Response Time: 4 hours.

Total Estimated Annual Hour Burden: 2,000-2,400.

SBA invites comments on: (1) Whether the proposed changes to this collection of information are necessary for the proper performance of SBA's functions, including whether the information will have a practical utility; (2) the accuracy of SBA's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques, when appropriate, and other forms of information technology.

For the reasons set forth in the preamble, SBA proposes to amend 13 CFR part 121 as follows:

2. In § 121.104 revise the second sentence of paragraphs (a), paragraphs (c) and (d)(3) to read as follows:

The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2019-0444; Product Identifier 2019-NM-028-AD” at the beginning of your comments. The FAA specifically invites comments on the overall regulatory, economic, environmental, and energy aspects of this NPRM. The FAA will consider all comments received by the closing date and may amend this NPRM because of those comments.

The FAA will post all comments received, without change, to http://www.regulations.gov, including any personal information you provide. The FAA will also post a report summarizing each substantive verbal contact the FAA receives about this NPRM.

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2018-0259R1, dated February 7, 2019 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for the following airplanes on which certain USB receptacles were installed using certain Fokker service information:

• Fokker Services B.V. Model F.27 Mark 050 airplanes.

• Fokker Services B.V. Model F.28 Mark 3000 airplanes.

• Fokker Services B.V. Model F28 Mark 0070 and Mark 0100 airplanes.

• Airbus SAS Model A318-111 airplanes.

• Airbus SAS Model A319-111, -112, -114, -115, and -132 airplanes.

• Airbus SAS Model A320-211, -212, -214, -231, -232, and -251N airplanes.

• Airbus SAS Model A321-211, -231, -232, -251N and -253N airplanes.

• Airbus SAS Model A330-202, -223, -243, -322 and -343 airplanes.

• Airbus SAS Model A340-312 and -313 airplanes.

• ATR—GIE Avions de Transport Régional Model ATR42-500 airplanes.

• ATR—GIE Avions de Transport Régional Model ATR72-212 and -212A airplanes.

• The Boeing Company Model 737-300, -400, -500, -700, -800 and -900ER series airplanes.

• The Boeing Company Model 757-200 series airplanes.

• The Boeing Company Model 767-200 and -300 series airplanes.

• The Boeing Company Model 777-200LR series airplanes.

• Bombardier, Inc., Model CL-600-2B16 (601-3A, 601-3R, and 604 Variants) airplanes.

• Bombardier, Inc., Model CL-600-2C10 (Regional Jet Series 700, 701 & 702) airplanes.

• Bombardier, Inc., Model DHC-8-202, -311, -315 and -402 airplanes.

The MCAI states:

You may examine the MCAI in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2019-0444.

Fokker Services B.V. has issued the following service information, which describes procedures for modifying the electronic flight bag USB receptacles located in the flight deck, including current limiting and overheat protection. These documents are distinct since they apply to different airplane models.

• Fokker Services F28 Generic Service Bulletin SBF28-46-002, Revision 0, dated July 27, 2018.

• Fokker Services F50/60 Generic Service Bulletin SBF50-46-006, Revision 0, dated July 27, 2018.

• Fokker Services F100/700 Generic Service Bulletin SBF100-46-008, Revision 0, dated July 27, 2018.

• Fokker Services Engineering Bulletin EBA320-0167, Revision 2, dated December 13, 2018.

• Fokker Services Engineering Bulletin EBA330-0011, Revision 0, Sequence 9, dated July 27, 2018.

• Fokker Services Engineering Bulletin EBA340-0005, Revision 0, Sequence 8, dated July 27, 2018.

• Fokker Services Engineering Bulletin EBAT72-0013, Revision 0, Sequence 7, dated July 27, 2018.

• Fokker Services Engineering Bulletin EBB737-0156, Revision 3, dated February 25, 2019.

• Fokker Services Engineering Bulletin EBB757-0020, Revision 1, dated October 2, 2018.

• Fokker Services Engineering Bulletin EBB767-0023, Revision 1, dated October 3, 2018.

• Fokker Services Engineering Bulletin EBB777-0009, Revision 1, dated October 3, 2018.

• Fokker Services Engineering Bulletin EBCL60-0010, Revision 1, dated August 30, 2018.

• Fokker Services Engineering Bulletin EBDHC8-0035, Revision 1, dated December 13, 2018.

This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with the State of Design Authority, the FAA has been notified of the unsafe condition described in the MCAI and service information referenced above. The FAA is proposing this AD because we evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop on other products of the same type design.

This proposed AD would require accomplishing the actions specified in the service information described previously.

The FAA estimates that this proposed AD affects 14 airplanes of U.S. registry. The FAA estimates the following costs to comply with this proposed AD:

According to the manufacturer, some or all of the costs of this proposed AD may be covered under warranty, thereby reducing the cost impact on affected individuals. The FAA does not control warranty coverage for affected individuals. As a result, the FAA has included all known costs in our cost estimate.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.

The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

This proposed AD is issued in accordance with authority delegated by the Executive Director, Aircraft Certification Service, as authorized by FAA Order 8000.51C. In accordance with that order, issuance of ADs is normally a function of the Compliance and Airworthiness Division, but during this transition period, the Executive Director has delegated the authority to issue ADs applicable to transport category airplanes and associated appliances to the Director of the System Oversight Division.

We determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify this proposed regulation:

1. Is not a “significant regulatory action” under Executive Order 12866;

2. Will not affect intrastate aviation in Alaska; and

3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:

Comments Invited

The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2019-0395; Product Identifier 2019-NE-11-AD” at the beginning of your comments. The FAA specifically invites comments on the overall regulatory, economic, environmental, and energy aspects of this NPRM. The FAA will consider all comments received by the closing date and may amend this NPRM because of those comments.

The FAA will post all comments we receive, without change, to http://www.regulations.gov, including any personal information you provide. The FAA will also post a report summarizing each substantive verbal contact we receive about this NPRM.

Transport Canada Civil Aviation (TCCA), which is the aviation authority for Canada, has issued AD CF-2018-12, dated April 27, 2018 (referred to after this as “the MCAI”), to address the unsafe condition on these products. The MCAI states:

You may obtain further information by examining the MCAI in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2019-0395.

The FAA reviewed P&WC Service Bulletin (SB) PW150-72-35331, Revision No. 1, dated May 3, 2016. The SB describes procedures for replacement of the affected HP centrifugal impeller. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

This product has been approved by the aviation authority of Canada and is approved for operation in the United States. Pursuant to our bilateral agreement with Canada, they have notified us of the unsafe condition described in the MCAI and service information referenced in this proposed AD. The FAA is proposing this AD because we evaluated all the relevant information provided by Transport Canada Civil Aviation and determined the unsafe condition described previously is likely to exist or develop in other products of the same type design.

This proposed AD would require replacement of affected HP centrifugal impellers.

P&WC SB No. PW150-72-35331, Revision No. 1, dated May 3, 2016 (“the SB”), indicates HP centrifugal impellers with serial numbers (S/Ns) listed in Table 1 of the SB should be removed prior to March 31, 2016 (15 days after the issue date of P&WC SB No. 35331, Initial Issue) and HP centrifugal impellers with S/Ns listed in Table 2 of the SB should be removed within 150 flight cycles or prior to accumulating 8,000 flight cycles since new. Our proposed AD would require removal of only the HP centrifugal impellers with S/Ns listed in Table 2 of the SB since the HP centrifugal impellers with S/Ns listed in Table 1 have already been removed from service. Our proposed AD is consistent with the SB and the MCAI in prohibiting the installation of any HP centrifugal impeller listed in Table 1 or Table 2 of the SB after the effective date of the proposed AD.

The FAA estimates that this proposed AD affects 20 engines installed on airplanes of U.S. registry.

The FAA estimates the following costs to comply with this proposed AD:

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.

The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

This AD is issued in accordance with authority delegated by the Executive Director, Aircraft Certification Service, as authorized by FAA Order 8000.51C. In accordance with that order, issuance of ADs is normally a function of the Compliance and Airworthiness Division, but during this transition period, the Executive Director has delegated the authority to issue ADs applicable to engines, propellers, and associated appliances to the Manager, Engine and Propeller Standards Branch, Policy and Innovation Division.

The FAA determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, the FAA certifies this proposed regulation:

(1) Is not a “significant regulatory action” under Executive Order 12866,

(2) Will not affect intrastate aviation in Alaska, and

(3) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:

The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2019-0443; Product Identifier 2019-NM-056-AD” at the beginning of your comments. The FAA specifically invites comments on the overall regulatory, economic, environmental, and energy aspects of this NPRM. The agency will consider all comments received by the closing date and may amend this NPRM based on those comments.

The FAA will post all comments, without change, to http://www.regulations.gov, including any personal information you provide. The FAA will also post a report summarizing each substantive verbal contact the agency receives about this NPRM.

The EASA, which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2019-0068, dated March 27, 2019 (“EASA AD 2019-0068”) (also referred to as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Airbus SAS Model A320-251N and A321-253N airplanes. The MCAI states:

EASA AD 2019-0068 describes procedures for replacement of the pylon block seals. This material is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to the FAA's bilateral agreement with the State of Design Authority, the agency has been notified of the unsafe condition described in the MCAI referenced above. The FAA is proposing this AD because the agency evaluated all pertinent information and determined an unsafe condition exists and is likely to exist or develop on other products of the same type design.

This proposed AD would require accomplishing the actions specified in EASA AD 2019-0068 described previously, as incorporated by reference, except for any differences identified as exceptions in the regulatory text of this AD.

In the FAA's ongoing efforts to improve the efficiency of the AD process, the FAA worked with Airbus and EASA to develop a process to use certain EASA ADs as the primary source of information for compliance with requirements for corresponding FAA ADs. As a result, the FAA expects that EASA AD 2019-0068 will be incorporated by reference in the FAA final rule. This proposed AD would, therefore, require compliance with the provisions specified in EASA AD 2019-0068, through that incorporation, except for any differences identified as exceptions in the regulatory text of this proposed AD. Service information specified in EASA AD 2019-0068 that is required for compliance with EASA AD 2019-0068 will be available on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2019-0443 after the FAA final rule is published.

The FAA estimates that this proposed AD would affect 9 airplanes of U.S. registry. The agency estimates the following costs to comply with this proposed AD:

According to the manufacturer, some or all of the costs of this proposed AD may be covered under warranty, thereby reducing the cost impact on affected individuals. The FAA does not control warranty coverage for affected individuals. As a result, the agency has included all known costs in the cost estimate.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.

The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

This proposed AD is issued in accordance with authority delegated by the Executive Director, Aircraft Certification Service, as authorized by FAA Order 8000.51C. In accordance with that order, issuance of ADs is normally a function of the Compliance and Airworthiness Division, but during this transition period, the Executive Director has delegated the authority to issue ADs applicable to transport category airplanes and associated appliances to the Director of the System Oversight Division.

The FAA determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify this proposed regulation:

(1) Is not a “significant regulatory action” under Executive Order 12866;

(2) Will not affect intrastate aviation in Alaska; and

(3) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:

Comments Invited

The FAA invites you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2019-0425; Product Identifier 2016-NE-13-AD” at the beginning of your comments. The FAA specifically invites comments on the overall regulatory, economic, environmental, and energy aspects of this NPRM. The FAA will consider all comments received by the closing date and may amend this NPRM because of those comments.

The FAA will post all comments we receive, without change, to http:// www.regulations.gov, including any personal information you provide. The FAA will also post a report summarizing each substantive verbal contact we receive about this proposed AD.

The FAA issued AD 2016-24-08, Amendment 39-18725 (81 FR 86567, December 1, 2016), (“AD 2016-24-08”), for all RR RB211-Trent 875-17, RB211-Trent 877-17, RB211-Trent 884-17, RB211-Trent 884B-17, RB211-Trent 892-17, RB211-Trent 892B-17, and RB211-Trent 895-17 model turbofan engines. AD 2016-24-08 requires repetitive inspections of the engine upper bifurcation fairing and repair or replacement of any fairing that fails inspection. AD 2016-24-08 resulted from reports of cracking and material release from an engine upper bifurcation fairing. The FAA issued AD 2016-24-08 to prevent failure of the engine fire protection system, engine fire, and damage to the airplane.

Since the FAA issued AD 2016-24-08, RR has developed a modification of the engine upper bifurcation nose fairing assembly. Performance of this modification terminates the repetitive inspection requirements of this AD. Also since the FAA issued AD 2016-24-08, the European Union Aviation Safety Agency (EASA) has issued AD 2018-0088, dated April 18, 2018, which requires repetitive inspections of the engine upper bifurcation fairing until modification of the engine upper bifurcation nose fairing assembly at the next engine shop visit.

The FAA reviewed RR Service Bulletin (SB) RB.211-72-J803, Revision 1, dated July 13, 2018, and Initial Issue, dated December 7, 2017. This service information describes procedures for modification of the engine upper bifurcation nose fairing assembly. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

The FAA reviewed RR Alert Non-Modification Service Bulletin (NMSB) RB.211-72-AJ165, Revision 2, dated August 21, 2018. This service information provides guidance on upper bifurcation fairing inspection locations. The FAA also reviewed AMM TASK 70-20-02, Water Washable Fluorescent Penetrant Inspection (Maintenance Process 213), and OMat 632, high sensitivity fluorescent penetrant inspection. This service information provides guidance on performing a fluorescent penetrant inspection.

The FAA is proposing this AD because we evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop in other products of the same type design.

This proposed AD would retain the repetitive inspection requirements of AD 2016-24-08. This proposed AD would also require modification of the engine upper bifurcation nose fairing assembly at the next engine shop visit after the effective date of this AD.

The FAA estimates that this proposed AD affects 125 engines installed on airplanes of U.S. registry.

The FAA estimates the following costs to comply with this proposed AD:

The FAA estimates the following costs to do any necessary repairs or replacements that would be required based on the results of the proposed inspection. The FAA has no way of determining the number of engines that might need these repairs or replacements:

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority.

The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

This AD is issued in accordance with authority delegated by the Executive Director, Aircraft Certification Service, as authorized by FAA Order 8000.51C. In accordance with that order, issuance of ADs is normally a function of the Compliance and Airworthiness Division, but during this transition period, the Executive Director has delegated the authority to issue ADs applicable to engines, propellers, and associated appliances to the Manager, Engine and Propeller Standards Branch, Policy and Innovation Division.

The FAA has determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify that the proposed regulation:

(1) Is not a “significant regulatory action” under Executive Order 12866,

(2) Will not affect intrastate aviation in Alaska, and

(3) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:

The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2019-0481; Product Identifier 2019-NM-058-AD” at the beginning of your comments. The FAA specifically invites comments on the overall regulatory, economic, environmental, and energy aspects of this NPRM. The FAA will consider all comments received by the closing date and may amend this NPRM based on those comments.

The FAA will post all comments, without change, to http://www.regulations.gov, including any personal information you provide. The FAA will also post a report summarizing each substantive verbal contact the agency receives about this NPRM.

The EASA, which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2019-0067, dated March 27, 2019 (“EASA AD 2019-0067”) (also referred to as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for all Airbus SAS Model A318 and A319 series airplanes; Model A320-211, -212, -214, -216, -231, -232, and -233 airplanes; and Model A321-111, -112, -131, -211, -212, -213, -231, and -232 airplanes. The MCAI states:

Related investigative actions include an HFEC inspection and a detailed visual inspection of the reworked area to ensure a crack-free condition. Corrective actions include reworking the horizontal upper stiffener, a modification (a cut-out of the sliding window frame stiffener), and repair.

EASA AD 2019-0067 describes procedures for repetitive HFEC inspections of the horizontal upper stiffener of the lateral window frame on the RH and LH sides for any cracking, and applicable related investigative and corrective actions. This material is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to the FAA's bilateral agreement with the State of Design Authority, the FAA has been notified of the unsafe condition described in the MCAI referenced above. The FAA is proposing this AD because the FAA evaluated all pertinent information and determined an unsafe condition exists and is likely to exist or develop on other products of the same type design.

This proposed AD would require accomplishing the actions specified in EASA AD 2019-0067 described previously, as incorporated by reference, except for any differences identified as exceptions in the regulatory text of this AD. This proposed AD also would require sending certain inspection results to Airbus.

In the FAA's ongoing efforts to improve the efficiency of the AD process, the FAA worked with Airbus and EASA to develop a process to use certain EASA ADs as the primary source of information for compliance with requirements for corresponding FAA ADs. As a result, EASA AD 2019-0067 will be incorporated by reference in the FAA final rule. This proposed AD would, therefore, require compliance with the provisions specified in EASA AD 2019-0067, through that incorporation, except for any differences identified as exceptions in the regulatory text of this proposed AD. Service information specified in EASA AD 2019-0067 that is required for compliance with EASA AD 2019-0067 will be available on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2019-0481 after the FAA final rule is published.

The FAA estimates that this proposed AD affects 1,291 airplanes of U.S. registry. The FAA estimates the following costs to comply with this proposed AD:

The FAA estimates the following costs to do any necessary on-condition actions that would be required based on the results of any required actions. The FAA has no way of determining the number of aircraft that might need these on-condition actions:

The FAA estimates that it would take about 1 work-hour per product to comply with the proposed on-condition reporting requirement in this proposed AD. The average labor rate is $85 per hour. Based on these figures, the FAA estimates the cost of reporting the inspection results on U.S. operators to be $85 per product.

A federal agency may not conduct or sponsor, and a person is not required to respond to, nor shall a person be subject to penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a current valid OMB control number. The control number for the collection of information required by this NPRM is 2120-0056. The paperwork cost associated with this NPRM has been detailed in the Costs of Compliance section of this document and includes time for reviewing instructions, as well as completing and reviewing the collection of information. Therefore, all reporting associated with this NPRM is mandatory. Comments concerning the accuracy of this burden and suggestions for reducing the burden should be directed to the FAA at 800 Independence Ave., SW, Washington, DC 20591, ATTN: Information Collection Clearance Officer, AES-200.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.

The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

This proposed AD is issued in accordance with authority delegated by the Executive Director, Aircraft Certification Service, as authorized by FAA Order 8000.51C. In accordance with that order, issuance of ADs is normally a function of the Compliance and Airworthiness Division, but during this transition period, the Executive Director has delegated the authority to issue ADs applicable to transport category airplanes and associated appliances to the Director of the System Oversight Division.

The FAA determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify this proposed regulation:

(1) Is not a “significant regulatory action” under Executive Order 12866,

(2) Will not affect intrastate aviation in Alaska, and

(3) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:

Comments Invited

The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2019-0483; Product Identifier 2019-NM-053-AD” at the beginning of your comments. The agency specifically invites comments on the overall regulatory, economic, environmental, and energy aspects of this NPRM. The agency will consider all comments received by the closing date and may amend this NPRM because of those comments.

The FAA will post all comments we receive, without change, to http://www.regulations.gov, including any personal information you provide. The agency will also post a report summarizing each substantive verbal contact we receive about this NPRM.

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2019-0059, dated March 20, 2019 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for Airbus SAS Model A330-200 Freighter, A330-200, and A330-300 series airplanes. The MCAI states:

You may examine the MCAI in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2019-0843.

This NPRM does not propose to supersede AD 2018-24-04 or AD 2017-19-13, Amendment 39-19043 (82 FR 43837, September 20, 2017) (“AD 2017-19-13”). Rather, the FAA has determined that a stand-alone AD is more appropriate to address the changes in the MCAI. This proposed AD would require revising the existing maintenance or inspection program, as applicable, to incorporate new or more restrictive airworthiness limitations. Accomplishment of the proposed actions would then terminate all requirements of AD 2018-24-04 and AD 2017-19-13.

Airbus has issued Airbus A330 Airworthiness Limitations Section (ALS) Part 2—Damage Tolerant Airworthiness Limitation Items (DT-ALI), Revision 03, dated October 15, 2018, as supplemented by Airbus A330 Airworthiness Limitations Section (ALS) Part 2—Damage Tolerant Airworthiness Limitation Items (DT-ALI), Variation 3.1, dated January 18, 2019, which describes mandatory maintenance tasks that operators must perform at specified intervals. This service information describes airworthiness limitations for certification maintenance requirements applicable to the DT-ALI. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with the State of Design Authority, the FAA has been notified of the unsafe condition described in the MCAI and service information referenced above. The FAA is proposing this AD because we evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop on other products of the same type design.

This proposed AD would require revising the existing maintenance or inspection program, as applicable, to incorporate new or more restrictive airworthiness limitations.

This proposed AD would require revisions to certain operator maintenance documents to include new actions ( e.g., inspections). Compliance with these actions is required by 14 CFR 91.403(c). For airplanes that have been previously modified, altered, or repaired in the areas addressed by this proposed AD, the operator may not be able to accomplish the actions described in the revisions. In this situation, to comply with 14 CFR 91.403(c), the operator must request approval for an alternative method of compliance according to paragraph (j)(1) of this proposed AD.

The MCAI specifies that if there are findings from the airworthiness limitations section (ALS) inspection tasks, corrective actions must be accomplished in accordance with [Airbus] maintenance documentation. However, this proposed AD does not include that requirement. Operators of U.S.-registered airplanes are required by general airworthiness and operational regulations to perform maintenance using methods that are acceptable to the FAA. The FAA considers those methods to be adequate to address any corrective actions necessitated by the findings of ALS inspections required by this proposed AD.

The FAA estimates that this proposed AD affects 107 airplanes of U.S. registry. We estimate the following costs to comply with this proposed AD:

The agency determined that revising the existing maintenance or inspection program takes an average of 90 work-hours per operator, although the agency recognizes that this number may vary from operator to operator. In the past, the agency has estimated that this action takes 1 work-hour per airplane. Since operators incorporate maintenance or inspection program changes for their affected fleet(s), the agency has determined that a per-operator estimate is more accurate than a per-airplane estimate. Therefore, the agency estimates the total cost per operator to be $7,650 (90 work-hours × $85 per work-hour).

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.

The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

This proposed AD is issued in accordance with authority delegated by the Executive Director, Aircraft Certification Service, as authorized by FAA Order 8000.51C. In accordance with that order, issuance of ADs is normally a function of the Compliance and Airworthiness Division, but during this transition period, the Executive Director has delegated the authority to issue ADs applicable to transport category airplanes and associated appliances to the Director of the System Oversight Division.

The FAA determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify this proposed regulation:

1. Is not a “significant regulatory action” under Executive Order 12866;

2. Will not affect intrastate aviation in Alaska; and

3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it would amend Class D and Class E airspace at Felts Field, Spokane, WA, to support IFR operations at the airport.

Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments, as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. Communications should identify both docket numbers and be submitted in triplicate to the address listed above. Persons wishing the FAA to acknowledge receipt of their comments on this notice must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. FAA-2018-0686; Airspace Docket No. 18-ANM-10.” The postcard will be date/time stamped and returned to the commenter.

All communications received before the specified closing date for comments will be considered before taking action on the proposed rule. The proposal contained in this notice may be changed in light of the comments received. A report summarizing each substantive public contact with FAA personnel concerned with this rulemaking will be filed in the docket.

An electronic copy of this document may be downloaded through the internet at http://www.regulations.gov. Recently published rulemaking documents can also be accessed through the FAA's web page at http://www.faa.gov/air_traffic/publications/airspace_amendments/.

You may review the public docket containing the proposal, any comments received, and any final disposition in person in the Dockets Office (see the ADDRESSES section for the address and phone number) between 9:00 a.m. and 5:00 p.m., Monday through Friday, except federal holidays. An informal docket may also be examined during normal business hours at the Northwest Mountain Regional Office of the Federal Aviation Administration, Air Traffic Organization, Western Service Center, Operations Support Group, 2200 S. 216th St., Des Moines, WA 98198-6547.

This document proposes to amend FAA Order 7400.11C, Airspace Designations and Reporting Points, dated August 13, 2018, and effective September 15, 2018. FAA Order 7400.11C is publicly available as listed in the ADDRESSES section of this document. FAA Order 7400.11C lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.

The FAA is proposing an amendment to Title 14 Code of Federal Regulations (14 CFR) part 71 by:

Modifying Class D airspace, and Class E surface area airspace at Felts Field Airport, Spokane, WA, by expanding an area that would be extended to the Spokane International Airport Class C surface area on the southwest and expanded 1.2 miles on the northeast; and

Establishing Class E airspace extending upward from 700 feet above the surface within a 4-mile radius of Felts Field Airport, Spokane, WA, and within 1.8 miles each side of the 53° bearing from the airport extending from the 4-mile radius to 6.5 miles from the airport, and within 3.0 miles each side of the 75° bearing from the point in space at (Lat. 47°37′46″ N., long.117°26′30″ W), extending 12.6 miles from the point in space coordinates. After a biennial review of the airspace, the FAA found modification of the airspace necessary for the safety and management of aircraft departing and arriving under IFR operations at the airport.

Class D and Class E airspace designations are published in paragraph 5000, 6002, and 6005, respectively, of FAA Order 7400.11C, dated August 13, 2018 and effective September 15, 2018, which is incorporated by reference in 14 CFR 71.1. The Class D and Class E airspace designations listed in this document will be published subsequently in the Order.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current, is non-controversial and unlikely to result in adverse or negative comments. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule, when promulgated, would not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

This proposal will be subject to an environmental analysis in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures” prior to any FAA final regulatory action.

Accordingly, pursuant to the authority delegated to me, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows:

Throughout this document wherever “we,” “us,” or “our” is used, we mean the EPA.

On June 5, 2019 (84 FR 26053), we published in the Federal Register a proposed rule pertaining to proposed approval of a CDD for the 2006 24-hour PM 2.5 Salt Lake City, UT NAA and requested comments by July 5, 2019. Specifically, the proposed determination is based upon quality-assured, quality-controlled, and certified ambient air monitoring data for the period 2016-2018, available in the EPA's Air Quality System (AQS) database, showing the area has monitored attainment of the 2006 24-hour PM 2.5 National Ambient Air Quality Standards (NAAQS). Based on our proposed determination that the Salt Lake City, UT NAA is currently attaining the 24-hour PM 2.5 NAAQS, the EPA also proposed to determine that the obligation for Utah to make submissions to meet certain Clean Air Act (CAA or the Act) requirements related to attainment of the NAAQS for this area is not applicable for as long as the area continues to attain the NAAQS.

We received a request from the Center for Biological Diversity to extend the comment period and, in response, we are extending the comment period to July 22, 2019. 1

Throughout this document whenever “we,” “us,” or “our” is used, we mean EPA.

The following outline is provided to aid in locating information in this preamble.

On June 22, 2010, EPA promulgated a new 1-hour primary SO 2 NAAQS of 75 parts per billion (ppb), which is met at an ambient air quality monitoring site when the 3-year average of the annual 99th percentile of daily maximum 1-hour average concentrations does not exceed 75 ppb, as determined in accordance with appendix T of 40 CFR part 50. See 75 FR 35520, codified at 40 CFR 50.17(a)-(b). On August 5, 2013, EPA designated a first set of 29 areas of the country as nonattainment for the 2010 SO 2 NAAQS, including the Steubenville nonattainment area comprised of portions within Ohio and West Virginia. See 78 FR 47191, codified at 40 CFR part 81, subpart C, §§ 81.336 and 81.349. These area designations became effective October 4, 2013. Section 191(a) of the CAA directs states to submit SIPs for areas designated as nonattainment for the SO 2 NAAQS to EPA within 18 months of the effective date of the designation, i.e., by no later than April 4, 2015 in this case. Under CAA section 192(a), these SIPs are required to demonstrate that their respective areas will attain the NAAQS as expeditiously as practicable, but no later than five years from the effective date of designation, which is October 4, 2018.

For a number of areas, including the West Virginia portion of the Steubenville Area, EPA published a notice on March 18, 2016 finding that West Virginia and other states had failed to submit the required SO 2 attainment SIPs by this submittal deadline. See 81 FR 14736. This finding initiated a deadline under CAA section 179(a) for the potential imposition of new source and highway funding sanctions. Ohio submitted its SO 2 attainment plan before the required deadline, therefore, EPA did not make such a finding with respect to Ohio's submittal for the Ohio portion of the Steubenville Area. Pursuant to West Virginia's submittal of its attainment plan on April 25, 2016, which became complete by operation of law, EPA subsequently notified West Virginia via letter dated June 13, 2017 that the SIP submittal was complete and that sanctions under section 179(a) would not be imposed in West Virginia due to its prior failure to submit a SIP. Additionally, under CAA section 110(c), the failure to submit finding triggered a requirement that EPA promulgate a Federal implementation plan (FIP) for West Virginia within two years of the finding unless, by that time (a) the state has made the necessary complete submittal and (b) EPA has approved the submittal as meeting all applicable requirements. The FIP obligation for West Virginia will no longer apply if EPA finalizes the approval that is proposed in today's action. The SIPs that West Virginia and Ohio submitted focus on four sources in the Steubenville area. The significant source in Brooke County, West Virginia, is the Mountain State Carbon facility (Mountain State Carbon), located in Follansbee. The other three significant sources in the Steubenville area are in Jefferson County, Ohio. Two of these facilities are located in Mingo Junction, namely the Mingo Junction Energy Center and the JSW Steel facility. 1 The other significant source in Jefferson County is the Cardinal power plant (Cardinal) located near Brilliant, Ohio.

In accordance with section 172(c) of the CAA, the April 25, 2016 West Virginia SO 2 attainment plan submittal for the West Virginia portion of the Area includes a 2011 base year emissions inventory; an attainment demonstration; the assertion that West Virginia's existing SIP-approved NSR program meets the applicable requirements for SO 2 ; requirements for RFP toward attaining the SO 2 NAAQS; a determination that the control strategy for the primary SO 2 source within the nonattainment areas constitutes RACM/RACT; contingency measures; and a consent order between West Virginia and Mountain State Carbon (the primary SO 2 source in the West Virginia portion of the Area) that includes emission limitations, operational restrictions, and associated compliance requirements for Mountain State Carbon, which WVDEP requested be incorporated into the West Virginia SIP. The attainment demonstration is comprised of an analysis that locates, identifies, and quantifies sources of emissions contributing to violations of the 2010 SO 2 NAAQS in the Steubenville Area and dispersion modeling of the emissions control measures in the Area that shows attainment of the 2010 SO 2 NAAQS. On November 27, 2017, WVDEP submitted a revised consent order for Mountain State Carbon to clarify certain provisions related to enforceability.

Likewise, Ohio's April 1, 2015 submittal for the Ohio portion of the Steubenville Area, as supplemented on October 13, 2015, included the nonattainment area submittal requirements under sections 172, 191 and 192 of the CAA. The supplemental submittal included rules which in the Steubenville Area limited the emissions of Mingo Junction Energy Center and JSW Steel.

On March 25, 2019, Ohio provided a requested SIP revision comprised of proposed further revisions to Ohio Administrative Code (OAC) Rule 3745-18-47, along with proposed revisions to associated compliance provisions in OAC Rules 3745-18-03 and 3745-18-04. The proposed SIP revision would modify the SO 2 limit for the coal-fired boilers at Cardinal. In the submittal, Ohio requested that EPA initiate action to propose approval of its attainment SIP concurrently with Ohio's administrative process to adopt the rule and submit the rule as a SIP revision to EPA. Under this process, EPA publishes its notice of proposed rulemaking in the Federal Register and solicits public comment in approximately the same time frame during which Ohio is completing its rulemaking process. OEPA provided an anticipated schedule for submittal of the final SIP package to EPA. If changes are made to the SIP revision after this proposal, such changes will be described in EPA's final rulemaking action and, if such changes are significant, EPA may re-propose the action and provide an additional public comment period before issuing a final action.

The remainder of this notice describes the requirements that such plans must meet in order to obtain EPA approval, provides a review of each States' plan with respect to these requirements, and describes EPA's proposed action on the plans.

Nonattainment area SIPs must meet the applicable requirements of the CAA, and specifically CAA sections 110, 172, 191 and 192. The EPA's regulations governing nonattainment area SIPs are set forth at 40 CFR part 51, with specific procedural requirements and control strategy requirements residing at subparts F and G, respectively. Soon after Congress enacted the 1990 Amendments to the CAA, EPA issued comprehensive guidance on SIPs, in a document entitled the “General Preamble for the Implementation of Title I of the Clean Air Act Amendments of 1990,” published at 57 FR 13498 (April 16, 1992) (General Preamble). Among other things, the General Preamble addressed SO 2 SIPs and fundamental principles for SIP control strategies. Id., at 13545-49, 13567-68. On April 23, 2014, the EPA issued recommended guidance for meeting the statutory requirements in SO 2 SIPs, in a document entitled, “Guidance for 1-Hour SO 2 Nonattainment Area SIP Submissions,” (April 2014 guidance) available at https://www.epa.gov/sites/production/files/2016-06/documents/20140423guidance_nonattainment_sip.pdf. In the April 2014 guidance, EPA described the statutory requirements for a complete nonattainment area SIP, which includes: An accurate emissions inventory of current emissions for all sources of SO 2 within the nonattainment area; an attainment demonstration; enforceable emissions limitations and control measures; demonstration of RFP; implementation of RACM (including RACT); NSR; and adequate contingency measures for the affected area.

In order for EPA to fully approve a SIP as meeting the requirements of CAA sections 110, 172 and 191-192 and EPA's regulations at 40 CFR part 51, the SIP for the affected area needs to demonstrate to EPA's satisfaction that each of the aforementioned requirements have been met. Under CAA sections 110(l) and 193, EPA may not approve a SIP that would interfere with any applicable requirement concerning NAAQS attainment and RFP, or any other applicable requirement, and no requirement in effect (or required to be adopted by an order, settlement, agreement, or plan in effect before November 15, 1990) in any area which is a nonattainment area for any air pollutant, may be modified in any manner unless it insures equivalent or greater emission reductions of such air pollutant.

CAA section 172(c)(1) directs states with areas designated as nonattainment to demonstrate that the submitted plan provides for attainment of the NAAQS. 40 CFR part 51, subpart G further delineates the control strategy requirements that SIPs must meet, and EPA has long required that all SIPs and control strategies reflect four fundamental principles of quantification, enforceability, replicability, and accountability. General Preamble, at 13567-68. SO 2 attainment plans must consist of two components: (1) Emission limits and other control measures that assure implementation of permanent, enforceable and necessary emission controls, and (2) a modeling analysis which meets the requirements of 40 CFR part 51, appendix W which demonstrates that these emission limits and control measures provide for timely attainment of the primary SO 2 NAAQS as expeditiously as practicable, but by no later than the attainment date for the affected area. In all cases, the emission limits and control measures must be accompanied by appropriate methods and conditions to determine compliance with the respective emission limits and control measures and must be quantifiable ( i.e., a specific amount of emission reduction can be ascribed to the measures), fully enforceable (specifying clear, unambiguous and measurable requirements for which compliance can be practicably determined), replicable (the procedures for determining compliance are sufficiently specific and non-subjective so that two independent entities applying the procedures would obtain the same result), and accountable (source specific limits must be permanent and must reflect the assumptions used in the SIP demonstrations).

EPA's April 2014 guidance recommends that the emission limits be expressed as short-term average limits ( e.g., addressing emissions averaged over one or three hours), but also describes the option to utilize emission limits with longer averaging times of up to 30 days so long as the state meets various suggested criteria. See April 2014 guidance, pp. 22 to 39. The guidance recommends that—should states and sources utilize longer averaging times—the longer-term average limit should be set at an adjusted level that reflects a stringency comparable to the 1-hour average limit at the critical emission value shown to provide for attainment that the plan otherwise would have set.

The April 2014 guidance provides an extensive discussion of EPA's rationale for concluding that appropriately set, comparably stringent limitations based on averaging times for periods as long as 30 days can be found to provide for attainment of the 2010 SO 2 NAAQS. In evaluating this option, EPA considered the nature of the standard, conducted detailed analyses of the impact of use of 30-day average limits on the prospects for attaining the standard, and carefully reviewed how best to achieve an appropriate balance among the various factors that warrant consideration in judging whether a state's plan provides for attainment. Id. at pp. 22 to 39. See also id. at Appendices B, C, and D.

As specified in 40 CFR 50.17(b), the 1-hour primary SO 2 NAAQS is met at an ambient air quality monitoring site when the 3-year average of the annual 99th percentile of daily maximum 1-hour average concentrations is less than or equal to 75 ppb. In a year with 365 days of valid monitoring data, the 99th percentile would be the fourth highest daily maximum 1-hour value. The 2010 SO 2 NAAQS, including this form of determining compliance with the standard, was upheld by the U.S. Court of Appeals for the District of Columbia Circuit in Nat'l Envt'l Dev. Ass'n's Clean Air Project v. EPA, 686 F.3d 803 (DC Cir. 2012). Because the standard has this form, a single exceedance of the NAAQS' 75 ppb level does not create a violation of the standard. Instead, at issue is whether a source operating in compliance with a properly set longer term average could cause exceedances of 75 ppb, and if so the resulting frequency and magnitude of such exceedances, and in particular whether EPA can have reasonable confidence that a properly set longer term average limit will provide that the 3-year average of the annual fourth highest daily maximum 1-hour average value will be at or below 75 ppb. A synopsis of how EPA judges whether such plans “provide for attainment,” based on modeling of projected allowable emissions and in light of the NAAQS' form for determining attainment at monitoring sites, follows.

For SO 2 attainment demonstrations based on 1-hour emission limits, the standard approach is to conduct modeling using fixed emission rates. The maximum emission rate that would be modeled to result in attainment ( i.e., in an “average year”  2 shows three, not four days with maximum hourly levels exceeding 75 ppb) is labeled the “critical emission value.” The modeling process for identifying this critical emissions value inherently considers the numerous variables that affect ambient concentrations of SO 2 , such as meteorological data, background concentrations, and topography. In the standard approach, the state would then provide for attainment by setting a continuously applicable 1-hour emission limit at this critical emission value. EPA recognizes that some sources have highly variable emissions, for example due to variations in fuel sulfur content and operating rate, that can make it extremely difficult, even with a well-designed control strategy, to ensure in practice that emissions for any given hour do not exceed the critical emission value. EPA also acknowledges the concern that longer term emission limits can allow short periods with emissions above the critical emission value which, if coincident with meteorological conditions conducive to high SO 2 concentrations, could in turn create the possibility of an exceedance of the NAAQS level occurring on a day when an exceedance would not have occurred if emissions were continuously controlled at the level corresponding to the critical emission value. However, for several reasons, EPA believes that the approach recommended in its guidance document suitably addresses this concern. First, from a practical perspective, EPA expects the actual emission profile of a source subject to an appropriately set longer term average limit to be similar to the emission profile of a source subject to an analogous 1-hour average limit. EPA expects this similarity because it has recommended that the longer-term average limit be set at a level that is comparably stringent to the otherwise applicable 1-hour limit, reflecting a downward adjustment from the critical emission value that is proportionate to the anticipated variability in the source's emissions profile. As a result, EPA expects either form of emission limit to yield a comparable reduction in SO 2 emissions and comparable air quality.

Second, from a more theoretical perspective, EPA has compared the likely air quality with a source having maximum allowable emissions under an appropriately set longer term limit, as compared to the likely air quality with the source having maximum allowable emissions under the comparable 1-hour limit. In this comparison, in the 1-hour average limit scenario, the source is presumed at all times to emit at the critical emission level, and in the longer-term average limit scenario, the source is presumed occasionally to emit at levels higher than the critical emission value but on average, and presumably at most times, to emit well below the critical emission value. In an “average year,” compliance with the 1-hour limit is expected to result in three exceedance days ( i.e., three days with maximum hourly values above 75 ppb) and a fourth day with a maximum hourly value at 75 ppb. By comparison, with the source complying with a longer-term limit, it is possible that additional exceedances of 75 ppb would occur that would not occur in the 1-hour limit scenario (if emissions exceed the critical emission value at times when meteorology is conducive to poor air quality). However, this comparison must also factor in the likelihood that exceedances of 75 ppb that would be expected in the 1-hour limit scenario would not occur in the longer-term limit scenario. This result arises because the longer-term limit requires lower emissions most of the time (because the limit is set well below the critical emission value), so a source complying with an appropriately set longer term limit is likely to have lower emissions at critical times than would be the case if the source were emitting as allowed with a 1-hour limit.

As a hypothetical example to illustrate these points, suppose a source that always emits 1,000 pounds of SO 2 per hour, which results in air quality at the level of the NAAQS ( i.e., results in a design value of 75 ppb). Suppose further that in an “average year,” these emissions cause the five highest maximum daily average 1-hour concentrations to be 100 ppb, 90 ppb, 80 ppb, 75 ppb, and 70 ppb. Then suppose that the source becomes subject to a 30-day average emission limit of 700 pounds per hour. It is theoretically possible for a source meeting this limit to have emissions that occasionally exceed 1,000 pounds per hour, but with a typical emissions profile, emissions would much more commonly be between 600 and 800 pounds per hour. In this simplified example, assume a zero background concentration, which allows one to assume a linear relationship between emissions and air quality. (A nonzero background concentration would make the mathematics more difficult but would give similar results.) Air quality will depend on what emissions happen on what critical hours but suppose that emissions at the relevant times on these 5 days are 800 pounds per hour, 1,100 pounds per hour, 500 pounds per hour, 900 pounds per hour, and 1,200 pounds per hour, respectively. (This is a conservative example because the average of these emissions, 900 pounds per hour, is well over the 30-day average emission limit.) These emissions would result in daily maximum 1-hour concentrations of 80 ppb, 99 ppb, 40 ppb, 67.5 ppb, and 84 ppb. In this example, the fifth day would have an exceedance of 75 ppb that would not otherwise have occurred, but the third day would not have exceedances that otherwise would have occurred, and the fourth day would be below rather than at 75 ppb. In this example, the fourth highest maximum daily 1-hour concentration under the 30-day average would be 67.5 ppb.

This simplified example illustrates the findings of a more complicated statistical analysis that EPA conducted using a range of scenarios using actual plant data. As described in appendix B of EPA's April 2014 guidance, EPA found that the requirement for lower average emissions over a longer averaging period is highly likely to yield better air quality than is required with a comparably stringent 1-hour limit. Based on analyses described in appendix B of its 2014 guidance, EPA expects that an emission profile with maximum allowable emissions under an appropriately set comparably stringent 30-day average limit is likely to have the net effect of having a lower number of exceedances of 75 ppb and better air quality than an emission profile with maximum allowable emissions under a 1-hour emission limit at the critical emission value. This result provides a compelling policy rationale for allowing the use of a longer averaging period, in appropriate circumstances where the facts indicate this result can be expected to occur.

The question then becomes whether this approach—which is likely to produce a lower number of overall exceedances even though it may produce some unexpected exceedances above the critical emission value—meets the requirement in section 110(a)(1) and 172(c)(1) for state implementation plans to “provide for attainment” of the NAAQS. For SO 2 , as for other pollutants, it is generally impossible to design a nonattainment area plan in the present that will guarantee that attainment will occur in the future. A variety of factors can cause a well-designed attainment plan to fail and unexpectedly not result in attainment, for example if meteorology occurs that is more conducive to poor air quality than was anticipated in the plan. Therefore, in determining whether a plan meets the requirement to provide for attainment, EPA's task is commonly to judge not whether the plan provides absolute certainty that attainment will in fact occur, but rather whether the plan provides an adequate level of confidence of prospective NAAQS attainment. From this perspective, in evaluating use of a 30-day average limit, EPA must weigh the likely net effect on air quality. Such an evaluation must consider the risk that occasions with meteorology conducive to high concentrations will have elevated emissions leading to exceedances that would not otherwise have occurred and must also weigh the likelihood that the requirement for lower emissions on average will result in days not having exceedances that would have been expected with emissions at the critical emissions value. Additional policy considerations, such as in this case the desirability of accommodating real world emissions variability without significant risk of violations, are also appropriate factors for EPA to weigh in judging whether a plan provides a reasonable degree of confidence that the plan will lead to attainment. Based on these considerations, especially given the high likelihood that a continuously enforceable limit averaged over as long as 30 days, determined in accordance with EPA's guidance, will result in attainment, EPA believes as a general matter that such limits, if appropriately determined, can reasonably be considered to provide for attainment of the 2010 SO 2 NAAQS.

The April 2014 guidance offers specific recommendations for determining an appropriate longer-term average limit. The recommended method starts with determination of the 1-hour emission limit that would provide for attainment ( i.e., the critical emission value), and applies an adjustment factor to determine the (lower) level of the longer-term average emission limit that would be estimated to have a stringency comparable to the otherwise necessary 1-hour emission limit. This method uses a database of continuous emission data reflecting the type of control that the source will be using to comply with the SIP emission limits, which (if compliance requires new controls) may require use of an emission database from another source. The recommended method involves using these data to compute a complete set of emission averages, computed according to the averaging time and averaging procedures of the prospective emission limitation. In this recommended method, the ratio of the 99th percentile among these long term averages to the 99th percentile of the 1-hour values represents an adjustment factor that may be multiplied by the candidate 1-hour emission limit to determine a longer term average emission limit that may be considered comparably stringent. 3 The guidance provided extensive recommendations regarding the calculation of the adjustment factor, for example to derive the adjustment factor from long term average versus 1-hour emissions statistics computed in accordance with the compliance determination procedures that the state is applying. These recommendations are intended to yield the most pertinent estimate of the impact of applying a longer-term average limit on the stringency of the limit in the relevant context. The guidance also addresses a variety of related topics, such as the potential utility of setting supplemental emission limits, such as mass-based limits, to reduce the likelihood and/or magnitude of elevated emission levels that might occur under the longer-term emission rate limit.

Preferred air quality models for use in regulatory applications are described in appendix A of EPA's Guideline on Air Quality Models (40 CFR part 51, appendix W). 4 In 2005, EPA promulgated AERMOD as the Agency's preferred near-field dispersion modeling for a wide range of regulatory applications addressing stationary sources (for example in estimating SO 2 concentrations) in all types of terrain based on extensive developmental and performance evaluation. Supplemental guidance on modeling for purposes of demonstrating attainment of the SO 2 standard is provided in appendix A to the April 23, 2014 SO 2 nonattainment area SIP guidance document referenced above. Appendix A provides extensive guidance on the modeling domain, the source inputs, assorted types of meteorological data, and background concentrations. Consistency with the recommendations in this guidance is generally necessary for the attainment demonstration to offer adequately reliable assurance that the plan provides for attainment.

As stated previously, attainment demonstrations for the 2010 1-hour primary SO 2 NAAQS must demonstrate future attainment and maintenance of the NAAQS in the entire area designated as nonattainment ( i.e., not just at the violating monitor) by using air quality dispersion modeling ( see appendix W to 40 CFR part 51) to show that the mix of sources and enforceable control measures and emission rates in an identified area will not lead to a violation of the SO 2 NAAQS. For a short-term ( i.e., 1-hour) standard, EPA believes that dispersion modeling, using allowable emissions and addressing stationary sources in the affected area (and in some cases those sources located outside the nonattainment area which may affect attainment in the area) is technically appropriate, efficient and effective in demonstrating attainment in nonattainment areas because it takes into consideration combinations of meteorological and emission source operating conditions that may contribute to peak ground-level concentrations of SO 2.

The meteorological data used in the analysis should generally be processed with the most recent version of AERMET. Estimated concentrations should include ambient background concentrations, should follow the form of the standard, and should be calculated as described in section 2.6.1.2 of the August 23, 2010 clarification memo on “Applicability of appendix W Modeling Guidance for the 1-hr SO 2 National Ambient Air Quality Standard” (U.S. EPA, 2010a).

Ohio and West Virginia have submitted various modeling analyses of prospective allowable SO 2 air quality in the Steubenville, OH-WV area. Ultimately, Ohio and West Virginia reached agreement on a common set of modeling runs that may be considered their joint attainment demonstration, which Ohio submitted on March 25, 2019 and West Virginia concurred with on May 1, 2019. The following subsection describes the history and nature of these various modeling analyses. Subsequent subsections review various features of the air dispersion modeling in Ohio's and West Virginia's joint attainment demonstration. Additional, more detailed discussion of the modeling is contained in the EPA technical support document (TSD) for today's action, which is available in the docket for this proposed rulemaking.

Ohio and West Virginia have made a variety of submittals in response to the requirements for nonattainment plans for SO 2 for the Steubenville area. As noted above, Ohio submitted its nonattainment plans for Steubenville and other areas on April 1, 2015. (A supplemental submittal dated October 13, 2015 provides rules with limits that are reflected in these nonattainment plans but does not change the pertinent modeling analyses.) West Virginia submitted its nonattainment plan for the Steubenville area on April 25, 2016, and on November 27, 2016, submitted a supplemental submission that changed certain provisions of the consent order with Mountain State Carbon.

Ohio's and West Virginia's modeling analyses were similar in most respects but differed in important respects as well. Both modeling analyses used a hybrid approach to characterize the release of fugitive emissions from the Mountain State Carbon facility, using hourly meteorology to estimate hourly plume heights and initial plume dispersion, as discussed at length below. Both analyses used the same version of AERMOD, the same receptor grid, the same set of modeled sources, the same emission rates for these facilities, and the same background concentration. However, Ohio and West Virginia used different meteorological data sets and used different approaches to characterize the release of emissions from Cardinal.

Ohio used meteorological data for a 1-year period from July 1, 2013 to June 30, 2014, using data from a tower near Mountain State Carbon to represent meteorology in the northern part of the area and using data from a station near Cardinal to represent meteorology in the southern part of the area. In contrast, West Virginia used meteorological data from a 3-year period from 2007 to 2009 from the tower near Mountain State Carbon to represent meteorology throughout the area.

Cardinal has three boilers, two of which (Units 1 and 2) emit from separate vents on a single stack and one of which (Unit 3) is vented out the top of a cooling tower that services the facility. Ohio represented the release from Units 1 and 2 as being released from the actual height of the stack. For Unit 3, Ohio found that the use of actual cooling tower parameters yielded concentration estimates dramatically unlike the concentrations monitored nearby, and Ohio instead used a hybrid approach (similar in some respects to the approach used in modeling Mountain State Carbon). West Virginia used the same characterization of Units 1 and 2 but for Unit 3 used the stack height and other release characteristics of a previously used Unit 3 stack.

EPA also conducted modeling of this Area, to inform discussions among EPA and the states regarding this Area. This modeling used West Virginia's meteorological data but used a different characterization of the stacks at Cardinal, for Units 1 and 2 using the height calculated from the formula in 40 CFR 51.100(ii)(2)(ii) (the stack height regulations) and for Unit 3 using the actual stack height in combination with historic other release characteristics.

Finally, as noted above, Ohio and West Virginia agreed on a joint attainment demonstration, which Ohio submitted on March 25, 2019 and West Virginia concurred with on May 1, 2019. This modeling used West Virginia's meteorological data, used EPA's characterization of the release of emissions from the stacks at Cardinal, but used an updated background concentration and demonstrated attainment based on an allowable Cardinal emission level that was somewhat higher than the previously modeled level. The details of this joint attainment demonstration and EPA's review are provided in the following subsections.

Ohio and West Virginia used the EPA-recommended AERMOD Model (version 18081, the most recent version) for their joint attainment demonstration. AERMOD is a refined, steady-state (both emissions and meteorology over a 1-hour time step), multiple source, air-dispersion model that, according to the Guideline on Air Quality Models, is the preferred model to use for industrial sources in this type of air quality analysis.

The joint attainment demonstration used processed meteorological data from Mountain State Carbon's 50 m meteorological tower in Follansbee, reflecting the data used in West Virginia's original attainment demonstration. Meteorological tower measurements were taken at 2 meters, 10 meters and 50 meters and included wind direction, wind speed, temperature and turbulence measurements. Additional surface meteorological data also came from the Pittsburgh International Airport located in western Pennsylvania, as necessary when data were not available from the Follansbee tower. One-minute data from Pittsburgh, Pennsylvania were processed using AERMINUTE (version 14337) and included in AERMET's (version 14134) Stage 2 processing. Surface characteristics were processed seasonally according to the Stage 3 file included in West Virginia's modeling files. Upper-air soundings needed to create the final processed meteorology data sets came from Pittsburgh. Three years of meteorological data from 2007-09 were processed in AERMET to produce the surface and profile files used in West Virginia's modeling demonstration. The Mountain State Carbon meteorological tower is considered an on-site measurement and therefore meets the minimum records length requirement (one year) outlined in section 8.4.2(e) of appendix W. The Guideline recommends using up to five years of on-site data where available. In this case, since subsequent years had significant missing data, EPA believes that the three years of data from 2007 to 2009 provides as good or better representation of meteorology in the area as any other available data set. Given the close location of the Follansbee met tower, EPA believes that the meteorological data is likely representative of conditions in the northern portion of the Steubenville area near Mountain State Carbon and the Mingo Junction facilities, where the highest collective impacts from the various sources in the area are estimated to occur. EPA believes the tower provides good measurements of the flow within the Ohio River Valley where the nonattainment sources are located, which is important because relatively steep terrain surrounding the Ohio River creates complex wind flows as air channels through the valley.

In their joint demonstration, Ohio and West Virginia used a receptor network with 21,476 receptors within the nonattainment area. Ohio also conducted additional modeling using numerous receptors outside the nonattainment area that demonstrated that the limits also provide for attainment outside the nonattainment area as well. Further discussion of the receptor network is provided in the TSD. EPA finds the receptor network used in the joint demonstration to be consistent with EPA guidance.

The joint modeling analysis included SO 2 emissions from the Mountain State Carbon coke plant and three facilities in Ohio including Cardinal, the Mingo Junction Energy Center, and JSW Steel. The modeling includes 59 emission points from these four facilities, including 48 emission points from the Mountain State Carbon coke plant.

The consent order for Mountain State Carbon sets limits applicable most of the year reflecting well controlled operation of coke oven gas desulfurization equipment. The consent order authorizes the company to shut down this control equipment for maintenance for up to 10 days in April and 10 days in November, while continuing coke production; however, the consent order also establishes a limit on coal sulfur content and limits operation of the coke plant, to minimize the SO 2 emissions during these periods. The joint modeling analysis uses an hourly emissions file reflecting the lower limits most of the year but reflecting the higher emissions associated with the restrictions that apply for 10 days in April and November.

Mingo Junction Energy Center is currently not operating. However, this facility is authorized to restart partially, and is subject to limits in Ohio's rules that would allow modest emissions upon restarting. Ohio's and West Virginia's modeling both appropriately reflect the emissions this facility would be allowed to emit, were it to resume operating. JSW Steel was not operating at the time of Ohio's original rule adoption, but this facility has resumed operation, subject to the adopted limits.

Cardinal was modeled as emitting 6,942 pounds per hour (lbs/hr) of SO 2 . As discussed further below, in Subsection F, in lieu of setting a 1-hour emission limit at this level, Ohio determined that a comparably stringent 30-day average emission limit would be 4,858.75 pounds per hour, which is the limit that Ohio has proposed. No other source emitting 100 tons of SO 2 per year or more is located within the nonattainment area in either Ohio or West Virginia. Table 1 shows the hourly allowable emissions and the modeled emissions (annual total) from the four facilities that were included in the attainment demonstration. The modeled emission rate for Cardinal in this table corresponds to the modeled emission rate of 6,942 pounds per hour, even though annual emissions would not be allowed to be greater than 21,281 tons per year (tpy), corresponding to the 30- day average limit of 4,858.75 pounds per hour (lb/hr).

West Virginia's consent order for Mountain State Carbon establishes individual limits for numerous emission points at the facility. Some of these limits are in the form of 1-hour limits, applicable every day of the year. Other limits are expressed as 24-hour average limits. Table 2 shows the emission limits included in West Virginia's consent order and the emission rate. For the emission points with 24-hour average limits, the limits are set at a lower level than the emission rate used in the attainment demonstration; the relationship between these two values is discussed in more detail in Subsection F below. (Subsection F also discusses the relationship between the critical emission value and the 30-day average limit that Ohio has proposed for Cardinal.)

No other source emitting 100 tons of SO 2 per year or more is located within the nonattainment area in either state, and the nearest source emitting 100 tons of SO 2 per year outside of Ohio ( i.e., in West Virginia or Pennsylvania) is about 35 kilometers south, in the Marshall County nonattainment area, sufficiently distant that explicit modeling of that source is not warranted for the Steubenville Area. According to the 2014 National Emissions Inventory (NEI), two other Ohio sources emitting over 100 tons of SO 2 per year are located within 50 kilometers of the nonattainment area, both within Jefferson County, Ohio. The first is the Sammis plant, located in Stratton, 20 kilometers north of the modeled design site near Steubenville, and which in 2014 emitted 10,262 tons of SO 2 . The second is a landfill, located in Amsterdam, 25 kilometers northwest of the modeled design value, and which in the 2014 NEI is estimated to emit 206 tons of SO 2 per year. The most common wind directions in this area are from the south and southwest, and modeling shows that these are the applicable wind directions at the times the design concentrations were modeled to occur. During these times, these sources would not be upwind of the nonattainment area. Furthermore, these sources are relatively distant from the relevant portions of the nonattainment area (and the concentration gradients in the area of interest resulting from these sources can be presumed to be relatively insignificant). For these reasons, explicit modeling of these sources to the north and northwest of the area would not have altered the design concentrations in the nonattainment area, and explicit modeling of these sources is not warranted.

Emissions from Mingo Junction Energy Center and from JSW Steel are released from conventional stacks, and Ohio and West Virginia have modeled these sources as point sources with reasonable stack parameters. However, determining appropriate release characteristics for Mountain State Carbon and Cardinal is considerably more difficult.

The various SO 2 emission points at Mountain State Carbon were modeled as either point sources or as volume sources. In numerous cases, emissions are released out of a stack, and these emissions were modeled as point sources with the associated stack parameters. Of particular note is one coke oven gas flare, which was modeled as a point source with its actual release height and typical other release characteristics. Fugitive coke battery emissions were modeled as volume sources, using hourly release heights and initial vertical dispersion values, reflecting hourly estimates from an independent run of the BLP dispersion model, which were entered into the hourly varying input file for use in AERMOD. As noted by West Virginia, this technique was used in previous particulate matter (PM 10 ) modeling demonstrations and was also used for the Allegheny County, Pennsylvania modeling demonstration for the 1-hour SO 2 nonattainment area. The BLP/AERMOD hybrid approach, however, is considered an alternative model under section 3.2.2 of appendix W—Guideline on Air Quality Models, and therefore requires approval from EPA's Regional Administrator as well as concurrence from EPA's Model Clearinghouse.

Allegheny County confronted similar circumstances in developing a plan for assuring attainment near the Clairton Works coke batteries, also involving coke plants in relatively complex terrain. The Allegheny County Health Department (ACHD) conducted extensive statistical analyses, finding that the same hybrid approach that West Virginia and Ohio used provides a more realistic simulation of fugitive emissions from coke ovens in that area than more conventional characterizations of the release of these emissions. 5 A more complete description of the ACHD approach can be found in the Model Clearinghouse Information Storage and Retrieval System (Record No: 18-III-01). 6

EPA Region 3 approved and requested concurrence from the Model Clearinghouse on the use for Mountain State Carbon of the same BLP/AERMOD hybrid approach for the fugitive coke oven emissions that Allegheny County justified for Clairton Works, based on the similarities of the sources and the complex terrain and meteorology in the two areas. On October 30, 2018 the Model Clearinghouse granted concurrence with EPA Region 3's approval to use the BLP/AERMOD hybrid approach for Mountain State Carbon's fugitive coke oven emissions. This concurrence is available on EPA's Model Clearinghouse Information Storage and Retrieval System, Record No: 18-III-02  7 and explains that the Model Clearinghouse concurred on the alternate model approval for the West Virginia SIP based on the unique similarities between the emissions sources at these two facilities, the similarities in complex topographical and meteorological settings surrounding these two facilities, and the similarities in alternative modeling approach for assessing the fugitive emissions from the coke oven batteries at these two facilities. Since Ohio as well as West Virginia is relying on this alternative modeling approach, Region 5 has also requested Model Clearinghouse concurrence on the use of this approach in the joint attainment plan, which the Model Clearinghouse has granted. 8

Characterizing the release of emissions from Cardinal also poses significant challenges. The emissions for Unit 3 are released from a cooling tower, i.e. with nearly unique release characteristics. The emissions for Units 1 and 2 are released from a more conventional stack, although the vents for these two units are on the same stack in very close proximity, which raises the question whether modeling these releases as a merged plume is appropriate. The following discussion summarizes Ohio's and West Virginia's rationale for their approach in the joint attainment demonstration. More detailed discussion of the characterization of these releases from Cardinal are provided in the TSD for this action.

The cooling tower at Unit 3 has a height of approximately 129 meters and a diameter at the top of approximately 56 meters. Modeling conducted by Ohio shows that modeling using these stack dimensions yields a peak concentration over 20,000 μg/m 3 and widespread modeled concentrations over 10,000 μg/m 3 , dramatically higher than the concentrations measured at well-placed nearby monitoring sites. These unrealistic concentration estimates are presumably the result of mischaracterization of the dispersion from such a wide opening, unlike the more conventional stack diameters present in the studies that informed the development of AERMOD. In the course of working with the states on planning for this Area, EPA conducted an additional modeling run using more conventional stack parameters, in particular using the actual release height of 129 meters but otherwise using the stack parameters used in West Virginia's original modeling analysis, reflecting the diameter and exit gas characteristics of the prior (conventional) stack at Cardinal's Unit 3. This run used actual emissions for a one-year period from July 1, 2013 to June 30, 2014, yielding concentration estimates that could be compared to the concentrations measured at multiple nearby monitoring sites. This run demonstrated that simulating the Unit 3 emissions as being released from a conventional stack yields concentration estimates that are dramatically closer to the observed concentrations. Indeed, based on a comparison of peak concentrations, 99th percentile concentrations, and the average of the top 25 concentrations modeled and monitored at four nearby monitoring locations, EPA found that modeling the Unit 3 emissions as being released from a conventional stack with the noted stack characteristics provides a reasonable characterization of this plume. Additional details of this modeling are provided in the appendix to the TSD for this rulemaking. The subsequent state model runs, including the model runs underlying the joint attainment demonstration, reflect this characterization of the release of emissions from Unit 3.

EPA has also examined whether the emissions from Units 1 and 2 warrant being merged. The emissions from these units are vented out of different vents from a single stack. Satellite imagery indicates that the top of the stack is approximately 22 meters in diameter, and the vents are approximately 9 meters in diameter with less than 2 meters separation between the edges of the two vents. Consequently, treating the release of the emissions from these two units as a single combined release (which, given the similarity of the two units, means modeling a single plume with twice the heat flux) provides for the best simulation of expected plume behavior. Nevertheless, EPA's stack height regulations restrict the circumstances under which plume merging is creditable.

Under 40 CFR 51.100(hh), plume merging is defined to be a prohibited dispersion technique except, in the case of merging occurring after July 8, 1985, for cases in which such merging is part of a change in operation at the facility that includes the installation of pollution controls and is accompanied by a net reduction in the allowable emissions of a pollutant. ( See 40 CFR 51.100(hh)(2)(B)). The stack height regulations also note that this exclusion from the definition of dispersion techniques shall apply only to the emission limitation for the pollutant affected by such change in operation.

As a compliance strategy for meeting the requirements of the Clean Air Interstate Rule (CAIR), Cardinal began operation of flue gas desulfurization of the emissions from Units 1 and 2 on March 25, 2008 and December 15, 2007, respectively. Available evidence indicates that the construction of the new stack to vent the emissions from these units was part of the same project as installation of flue gas desulfurization equipment. Although Ohio is proposing its emission limit reflecting a reduction of allowable emissions several years after the installation of the pollution controls, the merging accompanied the installation of controls and may also be considered to accompany a net reduction in allowable emissions in the sense that the initial request for credit for merging (in this SIP) is accompanied by a limit that requires the net emission reduction that the Cardinal control project achieved. In addition, although CAIR did not establish specific emission limits for Cardinal, CAIR imposed requirements contemporaneous with the installation of controls and construction of a new stack with a configuration resulting in the physical merging of the two plumes, requirements that resulted in a net reduction of SO 2 emissions from Cardinal. For these reasons, EPA views the merging of the plumes from Units 1 and 2 to qualify as creditable for SO 2 under 40 CFR 51.100(hh)(2)(ii)(B).

An important prerequisite for approval of an attainment plan is that the emission limits that provide for attainment be quantifiable, fully enforceable, replicable, and accountable. See General Preamble at 13567-68. The attainment plan for the Steubenville Area reflects limits on all significant SO 2 emission sources in the Area.

The limits on Ohio sources are in the form of state regulations, with the limits in OAC 3745-18-47 and related compliance provisions in OAC 3745-18-03 and 3745-18-04. The limits for Mingo Junction Energy Center and for JSW Steel are already an adopted part of these rules, as submitted on October 13, 2015. Ohio proposed revisions to these rules on March 25, 2019 to limit the emissions of Cardinal as well. On this same date, Ohio submitted these proposed revisions, provided a schedule for adoption of these revisions, requested EPA approval of these revisions, and requested that EPA conclude that final adoption of the limit for Cardinal, in conjunction with the other limits already adopted by Ohio and West Virginia, would assure attainment in this area. As discussed below, EPA's proposed action today is based on the understanding that Ohio will adopt these proposed rule revisions in final form in the near future, at which time this limit would be fully state enforceable, and then Federally enforceable upon EPA's final approval of the SIP. As set forth above, if the proposed limits are not finalized at the State level, then EPA will reconsider this proposed approval based on the limits that are actually in place on Cardinal.

The limits for the Mountain State Carbon facility are in Consent Order CO-SIP-C-2017-9. 9 WVDEP issued this consent order following a process with public notice and hearing and submitted the consent order for incorporation into the West Virginia SIP. EPA finds that the revised consent order submitted on November 27, 2017 meets the requirements for Federal enforceability.

Some of the limits that Ohio and West Virginia's plans rely on are expressed as longer-term average limits. In particular, some of West Virginia's limits for Mountain State Carbon are expressed as 24-hour average limits, and Ohio's proposed limit for Cardinal is expressed as a 30-day average limit. Therefore, EPA's review of these attainment plans considered the use of these limits, both with respect to the general suitability of using such limits for this purpose and with respect to whether the particular limits included in the plans have been suitably demonstrated to provide for attainment. The two subsections that follow address the derivation and suitability of the longer-term average limits for Mountain State Carbon and Cardinal, respectively.

Modeled emission rates at Mountain State Carbon represent the set of hourly critical emission values that (in combination with critical emission values for other facilities in the area) show compliance with the standard. Several of Mountain State Carbon's sources that consume the treated coke oven gas (COG) can experience fluctuating SO 2 emissions due to the variability in the sulfur content of the coal in the coke ovens and operations at the by-product plant that can impact sulfur removal efficiencies. To allow for these fluctuations, Mountain State Carbon requested a 24-hour block limit for its #1, #2, #3 and # 8 coke batteries, its new combined boilers 6, 7, 9, and 10 stack, and its Acid Plant Tail Gas Scrubber. Appendix D-2 of West Virginia's April 25, 2016 submittal describes the statistical analysis that was used to develop the proposed 24-hour average limits.

Actual historic operating data from the sources at Mountain State Carbon were used to calculate emission point-specific adjustment factors that were applied to the modeled critical emission value for the sources to determine a comparable emission limits with a 24-hour averaging period. The hourly SO 2 emission rates were calculated using the hourly H 2 S concentrations in the COG measured by Mountain State Carbon's existing analyzer and daily average COG flow rates for the combustion sources, assuming complete stoichiometric conversion of H 2 S to SO 2 during combustion of the COG. Table 3 addresses normal operation, showing the modeled emission rate, the adjustment factor, and the resulting comparable 24-hour average SO 2 emission rate for normal operation, calculated by applying the adjustment factor to the critical emissions value for normal operation.

Table 4 summarizes Mountain State Carbon's modeled emission rates for the total facility and for fugitive emissions during normal operations and during the two 10-day by-product plant outage periods in the model simulation. Facility wide emissions are listed in the table along with fugitive battery emissions, which were modeled using the BLP/AERMOD hybrid approach discussed previously. The fugitive coke oven emissions from Batteries 1, 2, 3 and 8 make up approximately 5% of the total emission and a smaller percentage during the by-product plant outages (~1%). Modeled emission rates represent the hourly critical emission value that shows compliance with the standard.

Based on a review of the state's submittal, EPA believes that the 24-hour average limit for sources at Mountain State Carbon provide a suitable alternative to establishing a 1-hour average emission limit for these sources. The State has used a suitable database in an appropriate manner and has thereby applied an appropriate adjustment, yielding a set of emission limits that have comparable stringency to the 1-hour average limits that the state determined would otherwise have been necessary to provide for attainment. While the 24-hour average limits allow occasions in which emissions may be higher than the level that would be allowed with the 1-hour limit, the State's limits compensate by requiring average emissions to be lower than the level that would otherwise have been required by a 1-hour average limit. For reasons described above and explained in more detail in EPA's April 2014 guidance for SO 2 nonattainment plans, EPA finds that appropriately set longer term average limits provide a reasonable basis by which nonattainment plans may provide for attainment. Based on its review of this general information as well as the particular information in West Virginia's plan, EPA finds that the 24-hour average limit for Mountain State Carbon in combination with other limitations in Ohio's plan as discussed below, will provide for attainment of the NAAQS.

The emission rate for Cardinal in the joint attainment demonstration is 6,942.2 pounds per hour. In lieu of a 1-hour limit at this level, Ohio has proposed a 30-day average limit that is designed to be comparably stringent. Specifically, Ohio's proposed 30-day average limit reflects multiplication of 6,942.2 pounds per hour times an adjustment factor (described below) determined in accordance with appendix C of EPA's SO 2 SIP guidance. The data used to determine this adjustment factor were the five then most recent years of hourly Cardinal emissions data reported to EPA's Clean Air Markets Division, i.e., the data for 2013 to 2017, except that data for a modest number of hours was not considered because the reported emissions are substitute data required under 40 CFR 75 in the absence of direct measurements. Since Cardinal already operates the control equipment necessary to meet the proposed limit, and has done so throughout this five-year period, EPA considers these data to provide a good representation of the variability of SO 2 emissions that Cardinal can be expected to continue to show.

Given Ohio's intent to adopt the limit in the form of a multi-stack limit governing the sum of emissions from the three units, the adjustment factor was derived from an evaluation of statistics for the hourly and 30-day average sums of emissions from the three units. Consistent with Ohio's proposed limit, these statistics included only days in which at least one of the three units was operating and considered only operating hours. That is, the five years of hourly emissions data were screened to eliminate a modest number of substitute data and then screened to eliminate days in which none of the three units were operating; plant total emissions were determined for each remaining hour, 30-operating-day average emissions (not including hours with no operation) were calculated for the end of each 30-operating-day period, and the 99th percentile value among the hourly (nonzero) values and the 99th percentile among the 30-operating-day values was computed. The resulting adjustment factor, reflecting the ratio of these 99th percentile values, was 70.0 percent. This adjustment factor may be considered to represent an estimate of the impact of using a 30-day average limit on total emissions of this facility. EPA finds that this analysis supports Ohio's conclusion that its proposed limit of 4,858.75 pounds per hour as a 30-day average is comparably stringent to a limit of 6,942.2 pounds per hour as a 1-hour limit, so that modeling Cardinal as emitting 6,942.2 pounds per hour is an appropriate means of assessing whether Ohio's proposed limit of 4,858.75 pounds per hour will provide for attainment.

EPA guidance states that limits with averaging times of up to 30 days can in many cases adequately provide for attainment so long as (1) the limit is established at an adjusted level such that the limit is comparably stringent to the 1-hour limit that is shown to provide for attainment (the latter reflecting the “critical emission level”), and (2) emissions are sufficiently constrained that occasions of emissions above the critical emission value will be limited in frequency and magnitude. The dataset used in assessing an appropriate adjustment factor, reflecting the last five calendar years, is also a suitable dataset for assessing the likely frequency and magnitude of emissions above the critical emission value. During these five years, from 2013 to 2017, total emissions from Cardinal were always below 4,858.75 pounds per hour on a 30-day average basis, and hourly emissions exceeded 6,942.2 pounds per hour less than 0.05 percent of the time. A spreadsheet containing these data and the calculations supporting the above adjustment factor are included in the dockets for this rulemaking on Ohio's and West Virginia's submittals.

The joint Ohio/West Virginia attainment demonstration used a uniform background concentration of 5.0 ppb (which AERMOD translates to 13.08 micrograms per cubic meter (μg/m 3 )). While Ohio's and West Virginia's original attainment demonstrations used a background value of 8.1 ppb (21.17 μg/m 3 ), based on 2007 to 2009 monitor values within the Steubenville nonattainment area, the updated analysis that Ohio provided uses a 2016 to 2018 design value from a regional monitor located approximately 21 kilometers south of the Steubenville nonattainment area along the Ohio River, namely site number 39-013-0006 in Belmont County, Ohio. As Ohio has shown, the complexities of terrain and meteorology along the Ohio River in the Steubenville area make it difficult to distinguish those values monitored in the Steubenville Area that are and are not influenced by modeled Steubenville Area sources, and so it is difficult to use the Steubenville Area monitoring data to determine a concentration that truly reflects a background concentration that would exist in absence of the modeled Steubenville area sources. Thus, the Belmont County monitor likely provides the best basis for determining an appropriate background concentration, and EPA believes that the 5.0 ppb value is an appropriate representation of background concentrations in the Area without the influence of the four modeled sources included in West Virginia's model demonstration.

The limit that Ohio has proposed for Cardinal is a limit on total SO 2 emissions from the plant. Therefore, an assessment of whether this limit provides for attainment must evaluate whether attainment is predicted under a full range of distributions of emissions allowed under this limit. Particularly given the 1.6 kilometer distance between the stack for Units 1 and 2 and the stack for Unit 3, the endpoints of the range of allowable distributions of emissions are (1) to have all emissions arising from the stack for Units 1 and 2 and (2) to have all emissions arising from the stack for Unit 3.

The joint attainment demonstration includes this range of simulations. In one simulation, 6,942.2 pounds per hour were emitted from the stack for Units 1 and 2. In a second simulation, 6,942.2 pounds per hour were emitted from the stack for Unit 3. (Since Unit 1 and Unit 2 are essentially identical units with a single stack and essentially identical other stack parameters, it was not necessary to distinguish whether emissions arose from Unit 1 or from Unit 2.) A third simulation used an intermediate, more typical mix of emissions, again adding up to 6,942.2 pounds per hour. Specifically, in this run, Units 1 and 2 together emitted 5,484 pounds per hour and Unit 3 emitted 1,458 pounds per hour. EPA believes that these three runs address the range of air quality that can result from the range of possible distributions of emissions at Cardinal within the total plant emissions limit proposed by Ohio, including the worst case distribution of allowable emissions.

The joint modeling demonstration shows that peak model concentrations occur in the northern Ohio portion of the Steubenville Area, near Mountain State Carbon, with substantial contributions from both Mountain State Carbon and Cardinal. The modeling shows that the maximum 1-hour SO 2 concentration is 192.1 microgram per cubic meter (ug/m 3 ) (corresponding to 73.4 parts per billion), which meets the 1-hour SO 2 NAAQS level of 196.4 ug/m 3 . The maximum modeled concentration includes a fixed representative background concentration and demonstrates that the limits used in the modeling achieve compliance with the 1-hour SO 2 NAAQS. This modeling demonstration follows current guidance included in appendix W to 40 CFR part 51—Guideline on Air Quality Models (2017). EPA finds that the modeling demonstration properly characterized source limits, local meteorological data, background concentrations and provided an adequate model receptor grid to capture maximum modeled concentrations. Final model results are below the current 1-hour SO 2 NAAQS and demonstrate that the modeled emission limits will allow the Steubenville Area to continue to comply with the standard.

The emissions inventory and source emission rate data for an area serve as the foundation for air quality modeling and other analyses that enable states to: (1) Estimate the degree to which different sources within a nonattainment area contribute to violations within the affected area; and (2) assess the expected improvement in air quality within the nonattainment area due to the adoption and implementation of control measures. As noted above, the state must develop and submit to EPA a comprehensive, accurate and current inventory of actual emissions from all sources of SO 2 emissions in each nonattainment area, as well as any sources located outside the nonattainment area which may affect attainment in the area. See CAA section 172(c)(3).

For the base year inventory of actual emissions, a “comprehensive, accurate and current” inventory can be represented by a year that contributed to the three-year design value used for the original nonattainment designation. The 2014 SO 2 Nonattainment Guidance notes that the base year inventory should include all sources of SO 2 in the nonattainment area as well as any sources located outside the nonattainment area which may affect attainment in the area.

In Ohio, major point sources in all counties are required to submit air emissions information annually, in accordance with EPA's Consolidated Emissions Reporting Rule (CERR). OEPA prepares a new periodic inventory for all SO 2 emission sectors every three years. The 2011 periodic inventory has been identified as one of the preferred databases for SIP development and coincides with nonattainment air quality in the Steubenville Area, thus the 2011 inventory was used as the base year for OEPA's submittal to fulfill the base-year emissions inventory requirements under the 2010 SO 2 standard.

Because October 4, 2018 was the attainment date for the 2010 SO 2 NAAQS, 2018 was selected as the future year to fulfill the projected year emissions inventory requirements under the 2010 SO 2 NAAQS. Emissions from 2011 for electric generating units (EGU) and non-EGUs were based on annual data reported by these sources in accordance with the CERR. Projections for area (non-point), on-road mobile (on-road), marine/air/rail (MAR), and non-road mobile (non-road) sources sectors were developed using 2011 county level emissions data downloaded from the 2011 NEI version 1-based Emissions Modeling Platform (Version 6). For townships, county level emissions for area, MAR and non-road were adjusted using population ratios while county level emissions for on-road were adjusted using vehicle miles traveled (VMT) ratios. The resulting inventory is summarized in Table 5.

West Virginia submitted a 2011 base year inventory for all source categories in the West Virginia portion of the Area. West Virginia used emissions from EPA's 2011 NEI Version 2 for the 2011 base year inventory. Since designation of the Area as nonattainment was based on monitored data from the 2010-2012 period, EPA finds the election of 2011 as a base year to be appropriate, as 2011 data is representative of the operations of the facilities that contributed to the monitored violations leading to the Area's designation. EPA reviewed the results, procedures, and methodologies for the base year and found them to be acceptable. Actual emissions from all the sources of SO 2 in the West Virginia portion of the area were reviewed and compiled for the base year emissions inventory requirement. The primary SO 2 -emitting point source located within the West Virginia portion of the area is Mountain State Carbon.

For the base year emissions inventory, WVDEP used emissions from EPA's 2011 NEI, Version 2. Table 1 shows the level of emissions, expressed in tons per year (tpy), in the West Virginia portion of the Steubenville Area for the 2011 base year and 2018 projection year inventories.

EPA has evaluated West Virginia's 2011 base year emissions inventory for the West Virginia portion of the Area and has made the determination that this inventory was developed consistent with section 172(c)(3) and EPA's guidance. Therefore, EPA is proposing to approve West Virginia's 2011 base year emissions inventory for the Area.

The attainment demonstration also provides for a projected attainment year inventory that includes estimated emissions for all emission sources of SO 2 which are determined to impact the nonattainment area for the year in which the area is expected to attain the NAAQS. West Virginia provided a 2018 projected emissions inventory for all known sources included in the 2011 base year inventory. SO 2 emissions are expected to decrease by approximately 290 tons, or approximately 33%, by 2018 from the 2011 base year. EPA finds that the use of the 2018 inventory is acceptable for use in the modeling analysis submitted by West Virginia for this Area.

OEPA's October 13, 2015 Attainment SIP submittal identified three sources in the Ohio portion of the Steubenville Area subject to RACM/RACT, consisting of Cardinal, JSW Steel and Mingo Junction Energy Center. As Cardinal is already equipped with a flue gas desulfurization unit, OEPA's submittal did not identify any further reductions required at this facility. However, on March 25, 2019, OEPA submitted proposed revisions to its OAC Rule 3745-18-47 that, if finalized, will impose more stringent limits on Cardinal that will assure continued, efficient operation of this control.

EPA's analysis of the proposed limit (discussed previously in section IV.J of this preamble) shows that the more stringent limits, along with the other measures in the area, will achieve attainment in the Area for the 2010 1-hour SO 2 NAAQS. As noted previously, the proposal establishes an SO 2 emission limit of 4,858.75 pounds per hour for Cardinal, effective upon adoption of the final rule.

Mingo Junction Energy Center is currently not operational but is allowed to be partially operated in the future, subject to stringent limits. For JSW Steel, OEPA considered potential SO 2 emission controls that included wet scrubbing, spray dryer absorption and dry sorbent injection for the electric arc furnace (EAF) but determined that these emission control technologies were not technically feasible for EAF operations. In addition, the RACT/BACT/LAER Clearing House (RBLC) does not identify any EAF that employs add-on SO 2 emission controls. The current recommended reasonably available control technology (RACT) for controlling SO 2 emissions from the EAF is a scrap management program, which is currently a requirement of the facility's permit. In addition, 40 CFR, Subpart YYYYY (Electric Arc Steelmaking Facilities) requires a facility subject to this subpart to employ an approved scrap management program to aid in reducing overall emissions. Therefore, EPA finds that the EAF at JSW Steel, upon resumption of operations, would be subject to limits that satisfy current RACT/RACM requirements.

In addition to the EAF, this facility also has a Ladle Metallurgical Furnace (LMF) to refine molten steel from the EAF, and three reheat furnaces. OEPA determined that with current permitted SO 2 rates at the LMF and a lower emission rate at the three reheat furnaces, additional RACT/RACM controls were not needed as a part of the control strategy for this Area.The Mingo Junction Energy Center is comprised of four 180 MMBtu/hr boilers that can burn a combination of natural gas, blast furnace gas or COG, and two of the units can also burn desulfurized coke oven gas. The consent order between West Virginia and Mountain State Carbon prohibits Mountain State Carbon from providing COG or desulfurized COG to the Mingo Junction Energy Center as of January 2017. Because the blast furnace at JSW Steel was permanently shut down and dismantled, this gas will also not be supplied. Therefore, it is highly likely the only form of fuel that may be burned in the future is natural gas.

Also, to meet Best Available Control Technology (BACT) requirements, a water injection system was installed on these four units. Their current permitted limits allow for 45.7 lbs/hr SO 2 , as a 3-hour rolling average, when burning natural gas or natural gas/blast furnace gas blend; or 49.5 lbs/hr SO 2 , as a 3-hour rolling average, when burning only COG, a blend of natural gas and COG, or a blend of natural gas, COG, and blast furnace gas. As part of the control strategy for this Area, emissions from each of the four units will be limited to 20.34 pounds per hour of SO 2 . Thus, EPA finds that additional RACT/RACM to control SO 2 emissions is not necessary for these sources.

West Virginia's plan for attaining the 1-hour SO 2 NAAQS in the West Virginia portion of the SO 2 nonattainment area is based on measures at Mountain State Carbon. For coke oven batteries, SO 2 reduction can be accomplished by two general methodologies: Pre-combustion desulfurization and restrictions on coal sulfur content. The Mountain State Carbon plant is currently controlled with a pre-combustion desulfurization unit that reduces the sulfur content of COG before it is combusted in the coke ovens. Based on its analysis, West Virginia proposed that the controls already in place, with a hydrogen sulfide (H 2 S) limit of 50 grains per dry standard cubic feet (dscf), constitutes RACT, and established SO 2 emission limits on the combustion sources during normal operation of the desulfurization unit to reflect the lowest achievable limits given the technology. However, the desulfurization unit is required to be shut down for up to 20 days a year for maintenance purposes, during which time the existing limits cannot be met without additional operational changes at the plant.

During the maintenance outages, West Virginia proposes its control strategy for Mountain State Carbon as a limit on the sulfur content of the coal to 1.25 percent and restricting the number of ovens in operation to 63 ovens per day on Battery #8, or no more than a combined 51 ovens per day on Battery #8 and no more than 72 ovens per day total on Batteries #1, #2, and #3. Additionally, Mountain State Carbon was required to physically disconnect the COG pipeline leading to the Mingo Junction Energy Center, was prohibited from providing COG to any entity outside of the Mountain State Carbon plant and was required to divert the #9 and #10 Boiler Stack into the combined #6 and #7 Boiler Stack. These requirements are part of a West Virginia consent order with Mountain State Carbon that West Virginia submitted with its April 25, 2016 attainment SIP, and revised in a supplemental submission on November 27, 2017, for incorporation into the West Virginia SIP. The consent order required compliance with these measures by January 1, 2017.

West Virginia and Ohio have determined that these measures, including the limits on Cardinal that Ohio is concurrently proposing at the State level, will suffice to provide for attainment in the Steubenville Area. EPA concurs and proposes to find that the measures submitted by Ohio and West Virginia, along with the limits on Cardinal proposed in Ohio rule 3745-18-47 to be submitted as a SIP revision after their adoption at the State level, satisfy the requirement in section 172(c)(1) to adopt and submit all RACM as needed to attain the standard as expeditiously as practicable.

Section 172(c)(5) of the CAA requires that an attainment plan require permits for the construction and operation of new or modified major stationary sources in a nonattainment area.

Ohio has a longstanding and fully implemented NSR program that meets the nonattainment NSR permitting requirements for the entire state of Ohio. This is addressed in OAC Chapter 3745-31. The Chapter includes provisions for the PSD permitting program in OAC rules 3745-31-01 to 3745-31-20 and the nonattainment NSR program in OAC rules 3745-31-21 to 3745-31-27. Ohio's NNSR program was conditionally approved on October 10, 2001 (66 FR 51570) and was approved by EPA on January 22, 2003 (68 FR 2909). The latest revisions to OAC Chapter 3745-31 were approved into Ohio's SIP on February 20, 2013 (78 FR 11748).

EPA has approved West Virginia's nonattainment NSR rules at 45CSR13 “Permits for Construction, Modification, or Relocation of Stationary Sources or Air Pollutants, and Procedures for Registration and Evaluation” and 45CSR19 “Requirements for Pre-Construction Review, Determination of Emission Offsets for Proposed New or Modified Stationary Sources of Air Pollutants and Bubble Concept for Intrasource Pollutants,” with the most recent revisions on August 20, 2014 (79 FR 42212) and on May 26, 2015 (80 FR 29973), respectively. These rules provide for appropriate new source review for SO 2 sources undergoing construction or major modification in the West Virginia portion of the Area without need for modification of the approved rules.

As both Ohio and West Virginia have appropriate NSR for SO 2 sources undergoing construction or major modification, EPA concludes that the NSR requirement has already been met for the Steubenville Area.

Section 172(c)(2) of the CAA requires that an attainment plan include a demonstration that shows reasonable further progress ( i.e., RFP) for meeting air quality standards will be achieved through generally linear incremental improvement in air quality. Section 171(1) of the CAA defines RFP as such annual incremental reductions in emissions of the relevant air pollutant as are required by this part (part D) or may reasonably be required by EPA for the purpose of ensuring attainment of the applicable NAAQS by the applicable attainment date. As stated originally in the 1994 SO 2 Guidelines Document and repeated in the April 2014 guidance, EPA continues to believe that this definition is most appropriate for pollutants that are emitted from numerous and diverse sources, where the relationship between particular sources and ambient air quality are not directly quantified. In such cases, emissions reductions may be required from various types and locations of sources. The relationship between SO 2 and sources is much more defined, and usually there is a single step between pre-control nonattainment and post-control attainment. Therefore, EPA interpreted RFP for SO 2 as adherence to an ambitious compliance schedule in both the 1994 SO 2 Guideline Document and the April 2014 guidance. The control measures for Mountain State Carbon included in West Virginia's attainment plan submittals (which are contained in Consent Order CO-SIP-C-2017-9 between West Virginia and Mountain State Carbon) and Ohio's proposed limits for Cardinal in Ohio rule 3745-18-47, both discussed previously, achieve attainment of the 2010 SO 2 NAAQS for the Steubenville Area. The West Virginia plan required that affected sources implement appropriate control measures as expeditiously as practicable in order to ensure attainment of the standard by the applicable attainment date (Mountain State Carbon was required under the consent order to implement the control measures starting on January 1, 2017). Proposed Ohio rule 3745-18-47 requires implementation of SO 2 emission limits for Cardinal upon the Ohio's adoption of the final rule, although Cardinal in fact has been meeting these limits for the last 6 years. Ohio and West Virginia concluded that their respective plans provide for RFP in accordance with the approach to RFP described in EPA's guidance. EPA concurs and proposes to find that the plans, along with the revised limits for Cardinal, provide for RFP in the Steubenville Area.

As noted above, EPA guidance describes special features of SO 2 planning that influence the suitability of alternative means of addressing the requirement in section 172(c)(9) for contingency measures for SO 2 , such that in particular an appropriate means of satisfying this requirement is for the state to have a comprehensive enforcement program that identifies sources of violations of the SO 2 NAAQS and to undertake an aggressive follow-up for compliance and enforcement. OEPA's plan states that it has an active enforcement program to address violations of the SO 2 NAAQS. OEPA will continue to operate a comprehensive program to identify sources of violations of the SO 2 NAAQS and to undertake an aggressive follow-up for compliance and enforcement, including expedited procedures for establishing enforceable consent agreements pending the adoption of revised SIPs. West Virginia's plan provides for satisfying the contingency measure requirement in this manner as well. West Virginia's plan provides for thorough compliance and enforcement inspections, monthly parametric monitoring data review, and quarterly record reviews along with cyclical stack testing for an aggressive compliance assurance plan. Non-compliance may lead to an immediate notice of violation and drafting of an enforceable consent order.

With the special features of SO 2 , EPA concurs that the contingency measures described by both Ohio and West Virginia meet the EPA guidance, and EPA proposes to approve both the Ohio and West Virginia plans for meeting the contingency measure requirement in this manner.

EPA is proposing to approve two SIP revision submittals, one submitted by the State of Ohio on April 1, 2015, which Ohio supplemented on October 13, 2015 and March 25, 2019, and the other submitted by the State of West Virginia on April 25, 2016, which West Virginia supplemented on November 27, 2017, with a clarification letter submitted on May 1, 2019. This proposed approval is contingent on Ohio adopting in final form the limit it submitted in proposed form on March 25, 2019. The submittals provide Ohio's and West Virginia's plans for attaining the 2010 1-hour SO 2 NAAQS and how they are meeting other nonattainment area planning requirements. Specifically, EPA is proposing to approve the emissions limitations and control measures, the base year emissions inventory, NNSR program, and contingency measures submitted by Ohio and West Virginia for the Steubenville Area. In the West Virginia SIP, EPA is proposing to approve the emission limits and other measures for Mountain State Carbon contained in a consent order submitted by West Virginia, including operational restrictions and sulfur content limits during the periods in which the desulfurization unit for Mountain State Carbon is shut down for maintenance purposes, and their associated compliance requirements. In the Ohio SIP, EPA is proposing to approve Ohio Administrative Code (OAC) Rule 3745-18-03, 3745-18-04, and 3745-18-47, provided Ohio completes adoption of these rules as proposed or in substantially similar form. EPA is also proposing approval of the Ohio and West Virginia attainment demonstrations, RFP, and RACT/RACM, provided that Ohio adopts and submits in final form its proposed SO 2 emission limits for Cardinal.

EPA is proposing approval of the attainment plans, RFP, and RACM/RACT for each State concurrently with Ohio's rulemaking process to establish revised enforceable limits on Cardinal. EPA plans no final action until Ohio finalizes and submits the proposed rule.

On May 1, 2019, WVDEP provided a letter to EPA stating that WVDEP concurs with the attainment demonstration submitted by Ohio, demonstrating that the area attains the standard notwithstanding the expected adoption of higher Cardinal emission limits than accounted for in WVDEP's initial submittal. EPA is proposing to finalize this action in conjunction with approval of the Ohio SIP submittal for revised OAC Rule 3745-18-03, pertinent sections of 3745-18-04, 10 and 3745-18-47. If Ohio fails to adopt final limits for Cardinal or adopts final limits that differ significantly from the proposed limits, EPA may withdraw this proposed action or may re-propose based on Ohio's final adopted rule before EPA takes final action.

The TSD for this proposed action is available on-line at www.regulations.gov, Docket No. EPA-R03-OAR-2019-0044 and Docket No. EPA-R05-OAR-2015-0699. The TSD provides additional explanation of EPA's analyses supporting this proposal.

EPA is taking public comments for 30 days following the publication of this proposed action in the Federal Register . We will take all comments into consideration in our final action.

In this document, EPA is proposing to include in a final EPA action regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, EPA is proposing to incorporate by reference the consent order between West Virginia and Mountain State Carbon identified as CO-SIP-C-2017-9, effective September 29, 2017, and Ohio rules OAC 3745-18-03, 3745-18-04 (except for paragraphs (D)(2), (D)(3), (D)(5), (D)(6), (D)(9)(c), (E)(2), (E)(3), and (E)(4), and 3745-18-47. EPA has made, and will continue to make, these materials generally available through http://www.regulations.gov and at the EPA Regional Offices (please contact the respective EPA Region 3 or 5 person identified in the For Further Information Contact section of this proposed rulemaking for more information).

Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the CAA and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, this proposed action merely approves state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this proposed action:

• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Order 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);

• Is not an Executive Order 13771 (82 FR 9339, February 2, 2017) regulatory action because SIP approvals are exempted under Executive Order 12866;

• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq. );

• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. );

• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);

• Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);

• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);

• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);

• Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and

• Does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).

In addition, the proposed approval of the SO 2 attainment plan SIPs submitted by Ohio and West Virginia is not approved to apply on any Indian reservation land or in any other area where EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications and will not impose substantial direct costs on tribal governments or preempt tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).

Throughout this document “we,” “us,” and “our” means the EPA.

In 1979, under section 109 of the CAA, the EPA established the primary and secondary NAAQS for ozone at 0.12 parts per million (ppm) averaged over a 1-hour period (44 FR 8202, February 8, 1979). 1 In 1997, we revised the primary and secondary NAAQS for ozone to set the acceptable level of ozone in the ambient air at 0.08 ppm, averaged over an 8-hour period (62 FR 38856, July 18, 1997). 2 In 2008, we further revised the primary and secondary ozone NAAQS to 0.075 ppm, averaged over an 8-hour period (73 FR 16436, March 27, 2008). 3 For additional information on ozone, please see the Technical Support Document (TSD) in the docket for this action and visit https://www.epa.gov/ozone-pollution.

In 2004, we published a rule governing implementation of the 1997 ozone NAAQS (Phase 1 Rule) (69 FR 23951, April 30, 2004). The Phase 1 Rule revoked the 1-hour ozone NAAQS along with designations and classifications for that standard and set anti-backsliding provisions for the transition from the 1-hour to the 1997 8-hour standard. Anti-backsliding provisions provide for controls that are not less stringent than the controls applicable to areas that were listed as nonattainment for the revoked ozone standards when the standards and designations were revoked.

In 2015, EPA revoked the 1997 ozone NAAQS and established anti-backsliding requirements for the revoked 1997 ozone NAAQS, as well as some revisions to the anti-backsliding requirements for the revoked 1-hour standard, in our final rule for implementing the 2008 ozone NAAQS (known as the “SIP Requirements Rule,” 40 CFR 51.1100, and 80 FR 12264). EPA considered the South Coast I decision on the Phase 1 Rule in developing the SIP Requirements Rule for the 2008 8-hour ozone standard. The anti-backsliding requirements for the revoked 1-hour and 1997 ozone NAAQS are listed in 40 CFR 51.1100(o). 4

The SIP Requirements Rule provided that an area will be subject to the anti-backsliding obligations for a revoked NAAQS until we approve (1) a redesignation to attainment for the area for the 2008 ozone NAAQS or (2) a “redesignation substitute” for a revoked NAAQS, which required an area to demonstrate that it had attained the revoked NAAQS due to permanent and enforceable measures and would maintain that standard for ten years (40 CFR 51.1105(b)(1)). In the SIP Requirements Rule, EPA had created the redesignation substitute procedure because it believed it did not have the authority under the CAA to change the designations of areas under a revoked NAAQS but wanted a means to terminate anti-backsliding requirements for an area that would otherwise be eligible for a redesignation had the standard not been revoked. 80 FR at 12304-05. Though EPA created the redesignation substitute based on the CAA 107(d)(3)(E) redesignation criteria, the procedure did not require states to demonstrate satisfaction of all five criteria. Texas submitted and EPA approved redesignation substitute demonstrations for the DFW area for both the 1-hour ozone NAAQS and the 1997 8-hour ozone NAAQS (81 FR 78688, November 8, 2016), on the basis that the area was attaining both standards based on permanent and enforceable emission reductions and had demonstrated that the area would maintain each standard for 10 years. The effect of the redesignation substitute was to terminate the anti-backsliding obligations for the DFW area to implement Serious nonattainment area requirements for the revoked ozone NAAQS (40 CFR 51.1100(o)).

On February 16, 2018, the D.C. Circuit Court vacated certain parts of the 2015 final rule for implementing the 2008 ozone NAAQS, including the redesignation substitute provision, based on the court's conclusion that those provisions were not consistent with CAA requirements. South Coast Air Quality Management District v. EPA, 882 F.3d 1138 (D.C. Cir. 2018) (“ South Coast II” ). In that decision, the Court held that the redesignation substitute tool was not consistent with CAA requirements because it failed to satisfy all five of the statutory requirements set forth in CAA section 107(d)(3)(E), which governs redesignations from nonattainment to attainment. Id. at 1152.

Under the 1-hour ozone NAAQS, the DFW area, consisting of Collin, Dallas, Denton and Tarrant Counties, was designated as nonattainment and classified as Moderate with an attainment deadline of November 15, 1996. 56 FR 56694, November 6, 1991. On February 18, 1998, we published a finding that the DFW area did not attain the 1-hour ozone standard by its applicable attainment date of November 15, 1996. See 63 FR 8128. As a result of this finding, the DFW ozone nonattainment area was reclassified by operation of law as a Serious ozone nonattainment area for the 1-hour standard on March 20, 1998. 63 FR 8128 (February 18, 1998). This determination of failure to attain by the DFW area's attainment date required the State to submit an attainment demonstration SIP with an attainment date of November 15, 1999, including measures to comply with Federal CAA requirements for Serious ozone nonattainment areas. On October 16, 2008, EPA published a determination of attainment that the DFW 1-hour ozone nonattainment area subsequently attained the 1-hour ozone standard based upon certified ambient air monitoring data. See 73 FR 61357. 5

Under the 1997 8-hour ozone NAAQS, the DFW area (consisting of the same four core counties plus the five surrounding counties of Ellis, Johnson, Kaufman, Parker and Rockwall)  6 was designated as nonattainment and classified as Moderate with an attainment deadline of no later than June 15, 2010 as set forth in the CAA for Moderate nonattainment areas. (69 FR 23858 and 69 FR 23951 April 30, 2004). The DFW area did not attain by the June 15, 2010 deadline and was reclassified as Serious with an attainment deadline of June 15, 2013. (75 FR 79302, December 20, 2010). On September 1, 2015 EPA published a determination of attainment that the DFW 1997 8-hour ozone nonattainment area attained the 1997 8-hour ozone NAAQS based upon complete, quality-assured and certified ambient air monitoring data that show the area has monitored attainment of the 1997 ozone NAAQS for the 2012-2014 monitoring period. (80 FR 52630).

On March 27, 2019, the Texas Commission on Environmental Quality (TCEQ or State) adopted the DFW Redesignation Request and Maintenance Plan SIP Revision for the 1-hour and 1997 ozone NAAQS and submitted this package to EPA on March 29, 2019. The SIP revision includes a request that the EPA redesignate the DFW area to attainment for the 1-hour and 1997 ozone NAAQS and provides a maintenance plan that will ensure the area remains in attainment of these NAAQS through 2032. This submittal addresses all five criteria of CAA section 107(d)(3)(E). As stated in their submittal, the TCEQ developed this redesignation request and maintenance plan SIP revision in order to address the uncertainty created by the court's South Coast II ruling.

We note that the Agency has previously taken the position that when it revokes a NAAQS in full, all the associated designations and classifications under that NAAQS are also revoked, see 69 FR 23951, 23969-70 (April 30, 2004), and the Agency no longer has the authority to change those designations, 80 FR 12296-97, 12304-05 (March 6, 2015). However, in the SIP Requirements Rule, EPA stated that it was retaining the listing of the designated areas in 40 CFR part 81 under the revoked 1997 NAAQS “for the sole purpose of identifying the anti-backsliding requirements that may apply to the areas at the time of revocation.” 80 FR 12296-97 (emphasis added). The South Coast II court decision did not address the Agency's interpretation that it lacks authority to alter an area's designation post-revocation of a NAAQS. The South Coast II court decision did hold that areas that were nonattainment for a revoked standard at the time of revocation could only terminate their obligations under that standard by demonstrating that they have met all five of the statutory redesignation criteria, and thus could not rely on the redesignation substitute mechanism included in the ozone implementation rule at issue. 882 F.3d at 1152 (“The Clean Air Act unambiguously requires nonattainment areas to satisfy all five of the conditions under § 7407(d)(3)(E) before they may shed controls associated with their nonattainment designation.”).

While the Court did not address the issue of EPA's authority to alter designations after a standard has been revoked, it did speak to EPA's interpretation that we lacked authority to change a nonattainment area's classification under a revoked ozone NAAQS. The Court held that the EPA is required to continue to reclassify to a higher classification, or bump up, areas under the revoked 1997 NAAQS that fail to attain on time, because, in the court's view, such reclassification is an anti-backsliding control. South Coast II, 882 F.3d at 1147-48. The Court's holding on this point could be interpreted to call into question EPA's interpretation that when a NAAQS and its associated designations and classifications are revoked in full, it no longer retains the authority to alter those designations and classifications.

EPA is proposing to find that Texas' submittal meets all five criteria in section 107(d)(3)(E), as required by the court, for the 1-hour and 1997 ozone NAAQS. EPA is therefore proposing to terminate the anti-backsliding obligations for Serious area requirements for the DFW area associated with the 1-hour and the 1997 ozone NAAQS.

We are also taking comment on whether EPA has the authority to alter the area's nonattainment area designation post-revocation, if only to fully clarify that such area has satisfied all requirements with respect to that revoked NAAQS. We therefore propose in the alternative that if EPA has such authority, the DFW area be redesignated to attainment for the revoked 1-hour and 1997 ozone NAAQS. However, regardless of whether designations can be altered after revocation, it is clear under South Coast II that EPA has the authority to terminate an area's anti-backsliding obligations under a revoked NAAQS for the area's classification if that area meets the section 107(d)(3)(E) criteria.

If finalized, this action will replace our previous approvals of DFW redesignation substitutes for the 1-hour and 1997 8-hour ozone NAAQS. It should be noted that we are not proposing to alter our previous conclusions that the DFW area has attained the 1-hour and 1997 8-hour ozone NAAQS due to permanent and enforceable emission reductions. Along with taking comment on whether EPA can alter an area's nonattainment designation, we are specifically taking comment on whether as part of this action, EPA has the authority to and should revise the listings in Part 81 for the DFW area for the 1-hour and 1997 ozone standards from nonattainment to attainment in recognition that the area meets the 107(d)(3)(E) criteria and it is no longer necessary to identify the area as one where anti-backsliding obligations apply under these standards for the Serious requirements. This proposed action would have no effect on the DFW area's obligations with respect to the 2008 or 2015 ozone NAAQS. The area still must meet the Moderate nonattainment area requirements for the 2008 ozone standard and implement controls that are in the EPA approved SIP, and we note that we have proposed to reclassify the DFW area to Serious for the 2008 ozone standard. See 83 FR 56781 (November 14, 2018). On June 4, 2018, the DFW area was designated as Marginal nonattainment for the 2015 ozone NAAQS (83 FR 25776).

As explained earlier in this action, we are proposing to terminate the Serious area classification's anti-backsliding obligations for the revoked standards or redesignate the area to attainment for the revoked standards, which would also have the effect of terminating the Serious area classification's anti-backsliding obligations, based on our conclusion that the five criteria in CAA section 107(d)(3)(E) are met. The CAA requires the following criteria: (1) We determine that the area has attained the NAAQS; (2) we have fully approved the applicable implementation plan for the area under CAA section 110(k); (3) we determine that the improvement in air quality is due to permanent and enforceable reductions in emissions resulting from implementation of the applicable implementation plan and Federal air pollutant control regulations and other permanent and enforceable reductions; (4) we have fully approved a maintenance plan for the area as meeting the requirements of CAA section 175A; and (5) we determine the State containing such area has met all requirements applicable to the area under CAA section 110 (Implementation plans) and part D (Plan Requirements for Nonattainment Areas).

Since Congress passed the CAA Amendments in 1990, EPA has consistently held the position that not every requirement that an area is subject to is applicable for purposes of redesignation. See, e.g., September 4, 1992, Memorandum from John Calcagni (“Calcagni Memo”) at 6. 7 For example, some of the Part D requirements, such as demonstrations of reasonable further progress, are designed to ensure that nonattainment areas continue to make progress toward attainment. EPA has interpreted these requirements as not “applicable” for purposes of redesignation under CAA section 107(d)(3)(E)(ii) and (v) because areas that are applying for redesignation to attainment are by definition already attaining the standard. Id. Similarly, EPA has long held that only those CAA provisions that are relevant to an area's designation and classification as a nonattainment area are “applicable” for purposes of redesignation under CAA section 107(d)(3)(E)(ii) and (v). For this reason, SIP revisions that apply regardless of whether an area is designated nonattainment or attainment, such as good neighbor plans required under CAA section 110(a)(2)(D)(i)(I), have not been considered “applicable” for purposes of redesignation. Finally, some requirements may not be applicable in this action given that both the 1-hour and 1997 8-hour NAAQS at issue in this notice were revoked for all purposes, and, post-revocation, the DFW area remained subject only to the anti-backsliding requirements identified by EPA in regulation. See 40 CFR 51.1105(a); 51.1100(o).

Below is the summary of our evaluation. Detailed information on our evaluation can be found in the TSD. EPA normally evaluates these criteria as the basis to redesignate an area to attainment, therefore, EPA has here conducted this analysis for purposes of terminating the 1-hour and 1997 ozone NAAQS anti-backsliding requirements or in the alternative, for redesignation.

In prior actions we determined that the DFW area attained the 1-hour ozone NAAQS (73 FR 61357, October 16, 2008) and 1997 8-hour ozone NAAQS (80 FR 52630, September 1, 2015). Quality-assured ambient air quality data found in the Air Quality System (AQS) database shows that the DFW area attained the 1-hour ozone NAAQS in 2006 and attained the 1997 ozone NAAQS in 2014 (Table 1). 8 We are proposing to determine that the DFW area is attaining the 1-hour and 1997 8-hour ozone NAAQS.

In a prior action we determined that the improvement in air quality in the DFW area is due to permanent and enforceable reductions in emissions (81 FR 78688, November 8, 2016). Texas identified State and Federal control measures that led to permanent and enforceable emission reductions. (See the TSD for this proposal for a thorough listing of the identified emission reductions.) Additionally, we have approved Reasonable Further Progress SIPs for the DFW area that document continuous emissions reductions due to permanent and enforceable measures for the 1-hour and 1997 8-hour ozone standards (70 FR 15592, March 28, 2005, 73 FR 58475, October 7, 2008, and 79 FR 67068, November 12, 2014). We propose that the DFW area has attained the 1-hour and 1997 ozone NAAQS due to permanent and enforceable emission reductions.

We are proposing to find that the DFW area has met all requirements under CAA section 110 (Implementation Plans and part D (Plan Requirements for Nonattainment Areas) that are applicable for purposes of redesignation (CAA section 107(d)(3)(E)(v)), and that those requirements have been fully approved into the Texas SIP (CAA section 107(d)(3)(E)(ii)).

110(a)(2) of the CAA contains the general requirements for a SIP. Section 110(a)(2) provides that the SIP must have been adopted by the state after reasonable public notice and hearing, and that, among other things, it must: (1) Include enforceable emission limitations and other control measures, means or techniques necessary to meet the requirements of the CAA; (2) provide for establishment and operation of appropriate devices, methods, systems and procedures necessary to monitor ambient air quality; (3) provide for implementation of a source permit program to regulate the modification and construction of stationary sources within the areas covered by the plan; (4) include provisions for the implementation of part C prevention of significant deterioration (PSD) and part D new source review (NSR) permit programs; (5) include provisions for stationary source emission control measures, monitoring, and reporting; (6) include provisions for air quality modeling; and, (7) provide for public planning and emission control rule development.

Part D of the CAA establishes the plan requirements for nonattainment areas. Section 172(c) in subpart 1 of part D sets forth the basic requirements of air quality plans for states with nonattainment areas that are required to submit plans on a schedule pursuant to CAA section 172(b). Subpart 2 of part D, which includes section 182 of the CAA, establishes specific requirements for ozone nonattainment areas depending on the areas' nonattainment classifications. The DFW area was classified as Serious under the 1-hour ozone NAAQS for the original four-county nonattainment area and Serious under the 1997 ozone NAAQS for the expanded nine-county nonattainment area. As such, the area is subject to the subpart 1 requirements contained in CAA sections 172(c) and 176, as well as the specific subpart 2 requirements of CAA section 182(c). A thorough discussion of the requirements contained in CAA sections172(c) and 182(c) can be found in the General Preamble for Implementation of Title I (57 FR 13498, April 16, 1992).

As discussed previously, EPA has consistently held the position that not every requirement that an area is subject to is applicable for purposes of redesignation. However, for the revoked ozone standards at issue here, over the past three decades the State has submitted numerous SIPs for the DFW area in order to implement those standards, improve air quality with respect to those standards, and to address anti-backsliding requirements for those standards. Therefore, even though some of the DFW area's SIP-approved measures address requirements that are not “applicable” for purposes of redesignation under CAA section 107(d)(3)(E)(ii) and (v), such as CAA section 182(b) reasonable further progress, or address requirements that were not retained for anti-backsliding, such as section 182(a) emissions inventories, we provide in the accompanying TSD the list of SIP-approved measures the State has adopted and EPA has approved for the DFW area with respect to the revoked 1-hour and 1997 8-hour ozone NAAQS. These include: (1) Emissions inventories, (2) emissions statements, (3) nonattainment new source review programs, (4) reasonably available control technology for sources of both VOC and NO X , (5) both basic and enhanced vehicle inspection and maintenance programs, (6) enhanced ambient monitoring, (7) attainment and reasonable further progress demonstrations, (8) contingency measures for failure to attain or make reasonable further progress, and (9) clean fuel vehicle programs. 9 Texas also submitted SIPs to address CAA section 110(a)(2) for the 1997 ozone NAAQS, which we approved in prior actions. 10

Section 107(d)(3)(E)(iv) of the CAA requires EPA to determine that the area has a fully approved maintenance plan pursuant to CAA section 175A. Under CAA section 175A, the maintenance plan must demonstrate continued attainment of the NAAQS for at least 10 years. To address the possibility of future NAAQS violations, the maintenance plan must contain contingency measures, as EPA deems necessary, to assure prompt correction of any future NAAQS violation.

EPA's interpretation of the elements under CAA section 175A is contained in the Calcagni Memo. Section 107(d)(3)(E)(iv) requires the maintenance plan to be “fully approved,” and the Calcagni Memo provides that a state may submit the redesignation request and maintenance plan at the same time and rulemaking on both may proceed on a parallel track. The Calcagni Memo further provides guidance on the content of a maintenance plan, explaining that it should address five requirements: (1) An attainment emissions inventory; (2) a maintenance demonstration; (3) an air quality monitoring commitment; (4) verification of continued attainment; and (5) a contingency plan.

In conjunction with the redesignation request submitted to EPA on April 4, 2019, TCEQ submitted a maintenance plan to provide for the ongoing attainment of the 1-hour and 1997 8-hour ozone NAAQS for at least ten years following the effective date of approval of the SIP revision. Our evaluation of the five requirements follows:

The Texas submittal includes a 2014 base year emission inventory (EI) for NO x and VOC. The TCEQ chose 2014 as it is one of the three years used to determine the design value for the 2014 attainment year (the year the area attained both the 1-hour and 1997 ozone NAAQS), consistent with the attainment inventory criteria in the Calcagni Memo. We propose to approve the 2014 base year EI.

Texas has demonstrated maintenance of the 1-hour and 1997 ozone NAAQS through 2032 by providing EI projections from 2014 through 2032 that show emissions of NO X and VOC for the DFW area remain at or below the attainment year (2014) emission levels. A maintenance demonstration need not be based on modeling. 11 The future year Texas EIs presented are 2020, 2026, and 2032: 2032 is more than 10 years after the expected effective date of this action and 2020 and 2026 show emissions between the attainment year and final maintenance year. To generate the future year EIs, Texas estimated the amount of growth that will occur between 2014 and the end of 2020, 2026, and 2032. Generally, the State followed our guidelines in estimating the growth in emissions. Tables 2 through 7 show the 2014 base year EI and the projected emissions for the years 2020, 2026 and 2032 in tons per day (tpd).

We note that the projections for the on-road mobile source inventory for 2032, which TCEQ submitted as motor vehicle emissions budgets, are consistent with maintenance of the 1-hour and 1997 NAAQS.

This is a summary of the Commission's Third Further Notice of Proposed Rulemaking ( TFNPRM ), in CG Docket No. 17-59, WC Docket No. 17-97; FCC 19-51, adopted on June 6, 2019 and released on June 7, 2019. The Declaratory Ruling that was adopted concurrently with the TFNPRM is published elsewhere in this issue of the Federal Register . The full text of document FCC 19-51 is available for public inspection and copying via the Commission's Electronic Comment Filing System (ECFS), and during regular business hours at the FCC Reference Information Center, Portals II, 445 12th Street SW, Room CY-A257, Washington, DC 20554. To request materials in accessible formats for people with disabilities (braille, large print, electronic files, audio format), send an email to fcc504@fcc.gov or call the Consumer and Governmental Affairs Bureau at 202-418-0530 (voice), 202-418-0432 (TTY).

This matter shall be treated as a “permit-but-disclose” proceeding in accordance with the Commission's ex parte rules. 47 CFR 1.1200 et seq. Persons making oral ex parte presentations are reminded that memoranda summarizing the presentations must contain summaries of the substances of the presentations and not merely a listing of the subjects discussed. More than a one or two sentence description of the views and arguments presented is generally required. See 47 CFR 1.1206(b). Other rules pertaining to oral and written ex parte presentations in permit-but-disclose proceedings are set forth in § 1.1206(b) of the Commission's rules, 47 CFR 1.1206(b).

The TFNPRM in document FCC 19-51 seeks comment on proposed rule amendments that may result in modified information collection requirements. If the Commission adopts any modified information collection requirements, the Commission will publish another notice in the Federal Register inviting the public to comment on the requirements, as required by the Paperwork Reduction Act. Public Law 104-13; 44 U.S.C. 3501-3520. In addition, pursuant to the Small Business Paperwork Relief Act of 2002, the Commission seeks comment on how it might further reduce the information collection burden for small business concerns with fewer than 25 employees. Public Law 107-198; 44 U.S.C. 3506(c)(4).

1. In the TFNPRM, the Commission takes additional steps to protect consumers from illegal calls and ensure the effectiveness and integrity of the SHAKEN/STIR Caller ID authentication framework by proposing rules to allow voice service providers to block calls based on Caller ID authentication in certain instances. The Commission further proposes protections to ensure that the most important calls are not blocked. The Commission also proposes to require voice service providers to implement the SHAKEN/STIR Caller ID authentication framework in the event that major voice service providers have not met Chairman's Pai's deadline for doing so by the end of 2019.

2. The Commission proposes a narrow safe harbor for voice service providers that offer call-blocking programs that take into account whether a call has been properly authenticated under the SHAKEN/STIR framework and may potentially be spoofed.

3. First, the Commission proposes a safe harbor for voice service providers that choose to block calls (or a subset of calls) that fail Caller ID authentication under the SHAKEN/STIR framework. A call would fail authentication when the attestation header has been maliciously altered or inserted—in other words, where a malicious actor has tried to inappropriately spoof another number and attempted to circumvent the protection provided by SHAKEN/STIR. Accordingly, the Commission would expect the vast majority of calls blocked in such circumstances to be illegitimate and call-blocking programs targeting such calls to be deserving of safe harbor. The Commission seeks comment on this view.

4. Are there other instances where authentication would fail? Would a safe harbor for such a call-blocking program provide a strong incentive to participating SHAKEN/STIR providers to ensure their public key infrastructure is up to date, as well as bolster the value of a failed authentication as a strong indicator of an illegal call? As SHAKEN/STIR deployment becomes more widespread, will failed authentication be a good proxy for illegal calls? To the extent it is overbroad, how should the Commission address false positives? Are there specific notification or other procedures that are most appropriate for use to enable callers to correct such false positives quickly?

5. Second, the Commission seeks comment on whether it should create a safe harbor for blocking unsigned calls from particular categories of voice service providers. Many larger voice service providers have committed to deploying SHAKEN/STIR in 2019. If other large voice service providers fail to do so, should blocking unsigned calls from such voice service providers, after a reasonable transition period, fall within the safe harbor? Alternatively, should a safe harbor target those voice service providers that are most likely to facilitate unlawful robocallers?

6. How can the Commission ensure that any safe harbor does not impose undue costs on eligible telecommunications carriers participating in the Commission's high-cost program? And how can the Commission ensure any such carve-out does not protect those few voice service providers that actively facilitate unlawful spoofing and robocalling, often from foreign countries?

7. Can downstream providers reliably determine on which network a particular unsigned call originated? Are there concerns regarding a call that was initially signed transiting a non-IP network? Should the Commission set a date certain for when this type of blocking is permissible?

8. Are there any particular protections the Commission should establish for a safe harbor to ensure that wanted calls are not blocked? The Commission seeks comment on whether to require providers seeking a safe harbor to provide for identifying and remedying the blocking of wanted calls.

9. Compliance with Rural Call Completion Rules. The Commission also seeks comment on how its proposal intersects with the Commission's rural call completion rules, including those implementing the Rural Call Quality and Reliability Act of 2017 (RCC Act), and whether to include additional criteria related to these rules. The Commission seeks comment on whether Caller ID authentication provides sufficient justification to permit a downstream provider to block calls from an upstream provider.

10. Use of SHAKEN/STIR-Based Analytics. SHAKEN/STIR's ability to determine the source of robocalls will be a significant contribution to the quality of these analytics. The Commission therefore seeks comment on the use of SHAKEN/STIR-based analytics once this technology is implemented.

11. Certain emergency calls must never be blocked. Accordingly, the Commission considers requiring any voice service provider that offers call-blocking to maintain a “Critical Calls List” of numbers it may not block. Such lists would include at least the outbound numbers of 911 call centers ( i.e., PSAPs) and government emergency outbound numbers. The prohibition on call blocking would only apply to authenticated calls. The Commission seeks comment on this proposal.

12. The Commission seeks comment on what numbers should be required on a Critical Calls List. How should the Commission define outbound numbers of 911 call centers ( i.e., PSAPs)? How should the Commission define government emergency outbound numbers? How can the Commission mitigate the burden of administering a Critical Calls List? Should a Critical Calls List be centrally maintained, or should each voice service provider instead maintain its own list? If centrally, what entity should maintain the list and how should voice service providers access the list? Does the Commission's proposal capture the most important numbers to avoid blocking?

13. The Commission also seeks comment on limiting Critical Calls List protections to only those calls for which the Caller ID is authenticated. Does this provide protection against illegal callers spoofing these crucial numbers? The Commission seeks comment on whether voice service providers should be required to complete calls where any level of attestation is present so long as the Caller ID authenticates, or whether the Commission should limit this requirement.

14. How can the Commission ensure that a Critical Calls List is sufficiently protected from abuse by unscrupulous callers? Should the list be kept non-public to avoid unlawful spoofing of listed numbers? The Commission seeks comment on whether there are any benefits to making the list public that outweigh these risks. If not public, who should be able to access it? The Commission invites comment on any other critical details. The Commission further seeks comment on the associated costs and benefits of implementing such a Critical Calls List.

15. Calls Placed to 911. The Commission see no reason that the rule prohibiting blocking of calls to 911 should not apply to the blocking proposed herein. The Commission seeks comment on the extent to which PSAPs have received calls with a spoofed Caller ID reporting a false emergency.

16. The Commission seeks comment on other ways to protect callers from erroneous blocking. Should the Commission consider other bases for blocking unwanted, illegal calls?

17. If major voice service providers fail to meet an end of 2019 deadline for voluntary implementation of the SHAKEN/STIR Caller ID authentication framework, the Commission proposes to require them to implement that framework. The Commission seeks comment on this proposal.

18. Implementation of the SHAKEN/STIR framework across voice networks is important in the fight against unwanted, including illegal, robocalls. Should major voice service providers fail to meet this end-of-year deadline, the Commission proposes to take appropriate regulatory action to ensure that voice service providers implement SHAKEN/STIR. If major voice service providers meet the end-of-year deadline, what steps should the Commission take to ensure that other voice service providers implement SHAKEN/STIR?

19. Determining whether it is necessary to mandate implementation of SHAKEN/STIR. The Commission seeks comment on how best to define “major voice service providers” for the purpose of evaluating the progress made by such providers in implementing SHAKEN/STIR by the end of this year.

20. The Commission seeks comment on how best to evaluate whether major voice service providers have met the end of year deadline for implementation set by Chairman Pai. In discussing SHAKEN/STIR, providers often refer to signing calls on an intercarrier basis and using signature information they receive to enhance the consumer experience. Should this be the standard the Commission uses to measure implementation? The Commission invites comment on this approach and on specific alternatives. Should the Commission require certifications documenting compliance?

21. Voice service providers covered by the SHAKEN/STIR implementation requirement. If the Commission mandates provider implementation of SHAKEN/STIR, the Commission proposes to require implementation by all voice service providers—wireline, wireless, and Voice over internet Protocol (VoIP) providers. The Commission seeks comment on this proposal. Are there other voice service providers the Commission should include? Are there any exceptions to an implementation requirement?

22. Implementation. If the Commission mandates implementation of SHAKEN/STIR, what should the Commission require providers to accomplish to meet the requirement? Should it require providers to sign calls on an intercarrier basis and use signature information they receive to enhance the consumer experience? Should the Commission impose other or different requirements?

23. For example, if the Commission mandates SHAKEN/STIR implementation, should the Commission require providers to adopt a uniform display showing consumers whether a call has been authenticated? Or should the Commission encourage provider experimentation to develop the most useful display for consumers?

24. Timing of the requirement. If the Commission mandates implementation of SHAKEN/STIR, how much implementation time should the Commission give voice service providers? The Commission invites commenters to propose specific categories of voice service providers, specify how the Commission should distinguish between or among them, explain why the Commission should do so for purposes of setting implementation deadlines, and propose specific implementation deadlines for each proposed specific category of voice service providers.

25. Governance. What role should the Commission have in SHAKEN/STIR governance? Industry has taken steps to establish a governance regime. Are there aspects of the governance authority that the Commission should handle itself or should its role be formal oversight? Are there other functions that the Commission should undertake to ensure the adoption and implementation of SHAKEN/STIR?

26. Legacy Networks. The Commission recognizes that there are challenges for smaller and rural carriers. The Commission seeks comment on how to encourage Caller ID authentication for carriers that maintain some portion of their network on legacy technology. Are there technologies available to enable legacy networks to participate in Caller ID authentication?

27. Illegal calls originating outside the United States. The Commission seeks comment on how the Commission and the industry can best leverage Caller ID authentication technology and specifically SHAKEN/STIR to combat illegal calls originating outside the United States.

28. Should the Commission create a mechanism to provide information to consumers about the effectiveness of providers' robocall solutions? If so, how should “effectiveness” be defined? How would the Commission obtain the information needed to evaluate the effectiveness of the robocall solutions?

29. The Commission seeks comment on its authority to adopt new rules here. Sections 201(b) and 202(a) of the Communications Act (the Act) have formed the basis for the Commission's traditional prohibitions on call blocking. The Commission also is charged with prescribing regulations to implement the Truth in Caller ID Act, which made unlawful the spoofing of Caller ID “in connection with any telecommunications service or IP-enabled voice service . . . with the intent to defraud, cause harm, or wrongfully obtain anything of value . . . .” And section 251(e) of the Act gives the Commission authority over the use and allocation of numbering resources in the United States, including the use of unallocated and unused numbers.

30. The Commission seeks comment on whether these statutory provisions—or any others—confer on the Commission sufficient authority to adopt rules to create a safe harbor for certain call-blocking programs and require voice service providers that offer call-blocking programs to maintain a Critical Calls List. Is creating a safe harbor equivalent to declaring certain practices presumptively just and reasonable? Is encouraging providers to adopt SHAKEN/STIR consistent with the Commission's authority under the Truth in Caller ID Act? Does the Commission's plenary authority over numbering extend to requiring that calls from certain numbers be sacrosanct? Does the Commission's authority depend, in part or at all, on whether the calls considered in a call-blocking program are in fact illegal under federal law or merely unwanted by consumers? Are these proposals necessary to allow voice service providers to help prevent unlawful acts and protect voice service subscribers? Would any of these proposals be limited only to calls purporting to use North American Numbering Plan (NANP) numbers?

31. The Commission believes section 251(e) of the Act, which grants the Commission plenary jurisdiction over the NANP resources in the United States and the authority to administer numbering resources, provides the Commission the authority to mandate Caller ID authentication and specifically SHAKEN/STIR. By permitting voice providers and consumers to identify when a Caller ID number has been spoofed, mandating SHAKEN/STIR would prevent NANP resources from being fraudulently exploited. The Commission concludes that section 251(e) provides it sufficient authority to adopt such rules. Do commenters agree? Are there any other statutory provisions or other sources of authority the Commission should consider?

32. As required by the Regulatory Flexibility Act of 1980, as amended, the Commission has prepared the Initial Regulatory Flexibility Analysis (IRFA) of the possible significant economic impact on a substantial number of small entities by the policies and rules proposed in the TFNPRM. Written public comments are requested on the IRFA. Comments must be identified as responses to the IRFA and must be filed by the deadlines for comments on the TFNPRM provided.

33. Need for, and Objectives of, the Proposed Rules

The TFNPRM proposes rules to permit voice service providers, on their own initiative, to block calls based on Caller ID authentication, specifically where the Caller ID is eligible for authentication but fails. The TFNPRM also proposes to require a “Critical Calls List” of numbers that must never be blocked so long as the Caller ID is authenticated. The TFNPRM further proposes and seeks comment on requiring voice service providers to implement the SHAKEN/STIR call authentication framework if major voice service providers fail to voluntarily implement it by the end of 2019.

34. The proposed and anticipated rules are authorized under sections 201, 202, 227, 251(e), and 403 of the Act, as amended, 47 U.S.C. 201, 202, 227, 251(e), 403.

35. As indicated above, the TFNPRM seeks comment on proposed rules to codify that voice service providers may block telephone calls in certain circumstances to protect subscribers from illegal calls, as well as on proposed rules to prevent the blocking of lawful calls. Until these requirements are defined in full, it is not possible to predict with certainty whether the costs of compliance will be proportional between small and large voice service providers. In the TRNPRM, the Commission seeks to minimize the burden associated with reporting, recordkeeping, and other compliance requirements for the proposed rules, such as modifying software, developing procedures, and training staff.

36. Under the proposed rules, the Commission tentatively concludes that voice service providers will need to keep records of Caller ID authentication information. In addition, voice service providers may need to set up communication with other voice service providers to share information about failed authentication. Voice service providers will also be required to maintain a “Critical Calls List” of numbers that should not be blocked.

37. The TFNPRM also proposes to require voice service providers to implement SHAKEN/STIR if major voice service providers have not voluntarily implemented the framework by the end of 2019. At this time, the Commission is not in a position to determine whether, if adopted, the Commission's proposals will require small entities to hire attorneys, engineers, consultants, or other professionals and cannot quantify the cost of compliance with the potential rule changes discussed herein. The TFNPRM proposes to require implementation by all voice service providers—wireline, wireless, and VoIP providers.

38. These proposed rules to codify that voice service providers may block telephone calls in certain circumstances to protect subscribers from illegal and unwanted calls are permissive and not mandatory. Small businesses may avoid compliance costs entirely by declining to block calls, or may delay their implementation of call blocking to allow for more time to come into compliance with the rules. However, the Commission intends to craft rules that encourage all carriers, including small businesses, to block such calls and the TFNPRM therefore seeks comment from small businesses on how to minimize costs associated with implementing the proposed rules. The TFNPRM poses specific requests for comment from small businesses regarding how the proposed rules affect them and what could be done to minimize any disproportionate impact on small businesses.

39. The Commission's proposed rules allow voice service providers to block calls based on certain criteria, including where the Caller ID fails authentication. In addition, the proposed rules protect callers from the risk of their calls being blocked erroneously. The TFNPRM requests feedback from small businesses and seeks comment on ways to make the proposed rules less costly and minimize the economic impact of the Commission's proposals.

40. The TFNPRM also seeks comment on the length of time the Commission should allow voice service providers to implement SHAKEN/STIR, whether smaller and medium-sized voice providers should be given additional time to implement this framework, and how to qualify and quantify voice providers' sizes. Moreover, the Commission seeks updated information for entities of all sizes, including small entities, regarding the upfront and recurring costs to providers of implementing SHAKEN/STIR.

41. The Commission expects to consider the economic impact on small entities, as identified in comments filed in response to the TFNPRM and the IRFA, in reaching its final conclusions and taking action in this proceeding.

42. None.

For the reasons discussed in the preamble, the Federal Communications Commission proposes to amend 47 part 64 as follows:

The additions to read as follows:

I. Background

DoD, GSA, and NASA are proposing to amend the FAR to make inflation adjustments of statutory acquisition-related thresholds under 41 U.S.C. 1908 applicable to existing contracts and subcontracts in effect on the date of the adjustment. This FAR change will implement section 821 of the NDAA for FY 2018 (Pub. L. 115-91).

41 U.S.C. 1908, Inflation adjustment of acquisition-related dollar thresholds, requires an adjustment every five years of acquisition-related thresholds for inflation using the Consumer Price Index for all urban consumers, except for the Construction Wage Rate Requirements statute (Davis-Bacon Act), Service Contract Labor Standards statute, and trade agreements thresholds. See FAR 1.109. The last FAR case which raised the thresholds for inflation was 2014-022, a final rule published on July 2, 2015, effective October 1, 2015. The next final rule to be published raising thresholds for inflation under 41 U.S.C. 1908 will be effective October 1, 2020.

As required by section 821 of the NDAA for FY 2018, DoD, GSA, and NASA are proposing to revise thresholds subject to inflation adjustment so that the periodic inflation adjustments will apply to existing contracts and subcontracts that contain the revised clauses.

A. The following summarizes the proposed changes to FAR parts 1, 5, 8, 9, 12, 13, 15, 19, 22, 25, 30, and 50:

1. Adds a new paragraph at FAR 1.109, Statutory acquisition-related dollar thresholds—adjustment for inflation, to explain the impact of section 821 of the NDAA for FY 2018.

2. Replaces numerical values, throughout the FAR text, that are based on the value of the micro-purchase threshold or the simplified acquisition threshold with the term “micro-purchase threshold” or “simplified acquisition threshold”.

3. Adds a statement at FAR 15.403-4 to explain that if a clause refers to the certified cost or pricing data threshold, and if the threshold is adjusted for inflation, then the changed threshold applies throughout the remaining term of the contract, unless there is a subsequent threshold adjustment.

4. Adds a statement at FAR 30.201-1 that the lower threshold for applicability of Cost Accounting Standards (CAS) is the amount set forth in 10 U.S.C. 2306a(a)(1)(A)(i), as adjusted for inflation.

B. The following summarizes proposed changes to FAR part 52.

1. Replaces, throughout part 52 as appropriate, numerical values that are based on the value of the micro-purchase threshold or the simplified acquisition threshold with the term “micro-purchase threshold” or “simplified acquisition threshold”. When the term “simplified acquisition threshold” or “micro-purchase threshold” is used, adds a reference to the definition in FAR 2.101.

2. Amends FAR 52.202-1, Definitions, to state that if the simplified acquisition threshold or micro-purchase threshold is adjusted for inflation, then the changed threshold applies throughout the remaining term of the contract, unless there is a subsequent threshold adjustment.

3. Replaces the numerical value for certain thresholds (other than the micro-purchase and simplified acquisition thresholds) with a reference to the applicable FAR text that specifies the numerical threshold.

4. Adds, to applicable clauses, the phrases “on the date of subcontract award,” “on the date of execution of the modification,” or “on the date of award of this contract”, to describe the date on which the applicable threshold value will be determined.

5. Adds a statement at FAR 52.214-28(b), 52.215-12(a), 52.215-13(b), and 52.215-21 that explains that if the threshold for submission of certified cost or pricing data is adjusted for inflation, then the changed threshold applies throughout the remaining term of the contract, unless there is a subsequent threshold adjustment.

6. Adds a reference, at FAR 52.230-1 through 52.230-5, to the lower CAS threshold specified at FAR 30.201-4(b).

This rule does not add any new solicitation provisions or clauses, or impact any existing provisions or clauses, except for the added references to acquisition-related thresholds in the FAR text.

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule is not a significant regulatory action, and therefore, this rule was not subject to the review of the Office of Information and Regulatory Affairs under section 6(b) of E.O. 12866. This rule is not a major rule under 5 U.S.C. 804.

This rule is not an E.O. 13771 regulatory action, because this rule is not significant under E.O. 12866.

DoD, GSA, and NASA do not expect this proposed rule to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601 et seq. However, an Initial Regulatory Flexibility Analysis (IRFA) has been performed and is summarized as follows:

The Regulatory Secretariat Division has submitted a copy of the IRFA to the Chief Counsel for Advocacy of the Small Business Administration. A copy of the IRFA may be obtained from the Regulatory Secretariat Division. DoD, GSA, and NASA invite comments from small business concerns and other interested parties on the expected impact of this rule on small entities.

DoD, GSA, and NASA will also consider comments from small entities concerning the existing regulations in subparts affected by the rule in accordance with 5 U.S.C. 610. Interested parties must submit such comments separately and should cite 5 U.S.C. 610 (FAR Case 2018-007), in correspondence.

The Paperwork Reduction Act (44 U.S.C. Chapter 35) does apply; however, the proposed changes to the FAR do not impose new information collection requirements that require the approval of the Office of Management and Budget (OMB) under 44 U.S.C. 3501, et seq. The changes do not impose additional information collection requirements to the paperwork burden previously approved under the following OMB Control Numbers: 9000-0007, Subcontracting Plans; 9000-0018, Certification Of Independent Price Determination, Contractor Code of Business Ethics and Conduct, and Preventing Personal Conflicts of Interest; 9000-0027, Value Engineering Requirements; 9000-0094, Debarment, Suspension, and Other Responsibility Matters; 9000-0091, Anti-Kickback Procedures; 9000-0159, System for Award Management Registration (SAM); 9000-0136, Commercial Item Acquisitions; 9000-0034, Examination of Records by Comptroller General and Contract Audit; 9000-0013, Certified Cost or Pricing Data and Data Other Than Certified Cost or Pricing Data; 9000-0048, Authorized Negotiators and Integrity of Unit Prices; 9000-0173, Limitations on Pass-Through Charges; 9000-0045, Bid Guarantees, Performance, and Payments Bonds, and Alternative Payment Protection; 9000-0010, Progress Payments, SF 1443; 9000-0149, Subcontract Consent and Contractors' Purchasing System Review; 1235-0007, Labor Standards for Federal Service Contracts; 1235-0025, Nondisplacement of Qualified Workers Under Service Contracts, Executive Order 13495; 1250-0004, Office of Federal Contract Compliance Programs Recordkeeping and Reporting Requirements Under the Vietnam Era Veterans' Readjustment Assistance Act of 1974, as Amended; and 1250-0005, Office of Federal Contract Compliance Programs Recordkeeping and Reporting Requirements Under Rehabilitation Act of 1973, as Amended Section 503.

Therefore, DoD, GSA, and NASA are proposing to amend 48 CFR parts 1, 5, 8, 9, 12, 13, 15, 19, 22, 25, 30, 50, and 52 as set forth below:

The addition reads as follows: